The Wealth & Wisdom Blog

“A boat is a hole in the water into which one pours money.” ¹ One of my sons recently celebrated his 14^th birthday.  To celebrate his own day of birth, my son cut himself a piece of birthday cake, the size of which could have fed a small village, and consumed the entire piece in one sitting.  We have adjusted our grocery budget accordingly.

In the estate planning and gift planning space, certain gifts made to a charity or a family member are sometimes called “gifts that eat.”  Once a child becomes the owner of a gifted asset, the gift will “eat into” the child’s personal expense budget.  In this month’s update, I briefly summarize the legal and tax issues of “follow-on” family gifting—that is, gifts made to support previous gifts given.

(more…)

Compared to world events expected to occur in 2024, upcoming tax law changes are, admittedly, relatively tame.  Perhaps you are looking forward to the Paris Summer Olympics, or hold guarded optimism about your child or grandchild’s big game or musical performance.  You certainly know about the newest season of your favorite streaming television show.  You also understand you must endure coverage of the upcoming presidential election.

(more…)

This was a great Thanksgiving, but who will host Thanksgiving next year?  Based on calls we receive from clients in the weeks following Thanksgiving, we know that home and cabin ownership planning is a common discussion topic during Thanksgiving.  In this month’s update, I provide a brief overview of a Qualified Personal Residence Trust (“QPRT), which is one of several legal strategies a family might consider to transfer ownership of a home or cabin to a child or children during lifetime.

(more…)

The IRS announced last month that it plans to increase audits of wealthy individuals and partnerships, with a special focus on the seventy-five largest partnerships.  According to the IRS announcement, the purpose of the audits will be to, “identify sophisticated schemes intended to avoid taxes.”  In response to this IRS announcement, in this month’s update I briefly summarize how a family partnership plan is generally implemented as well as the resulting legal and tax benefits of the planning.

(more…)

“Our kids are wealthier than we are!”  Some of my clients emphasize the wealth of their children as we customize their multi-generational estate plan.  “How can we help our grandchildren instead?”

As noted in a recent Wall Street Journal article, many wealthy families are implementing plans to lock in current federal exemption amounts to save estate and gift taxes at multiple generations.  One strategy is to implement a certain type of trust, known variously as a generation-skipping transfer trust, a dynasty trust, or a GST Trust. Contrary to what may be inferred by these monikers, a GST Trust can be a blessing in disguise to the very children who are ostensibly skipped by the GST Trust. In this month’s update, I summarize the benefits and costs of the GST Trust planning strategy.

(more…)