Lifetime Exclusion Change – Let’s Plan for your Future

The current Lifetime Exclusion for federal estate taxes is scheduled to expire on December 31, 2025, and will return to its pre- 2017 level of $5.5 million adjusted to approximately $7M for inflation. The current exemption is $13.6M. While it is possible that as in 2013, when the then President and Congress
reached a compromise and enacted legislation which prevented the exemption from being reduced
from $3.5M to $1M as it was then scheduled, it does not seem as likely for such a compromise to be had
under the current deeply divided political climate. Therefore, it is not too soon to at least consider
designing, and possibly implementing, a plan for this eventuality.

Some ideas to include in this plan are:

• Creation of an intentionally defective grantor trust to which you sell and/or gift assets to your
  children and descendants
•  Creating a spousal lifetime access trust to shelter assets from estate taxes
  If you own a business, gifting and/or selling at a discount, fractional interests, either voting or
  nonvoting, to family members who you believe are qualified to carry on the business after you
  retire or upon your death.
• Create a family limited liability company to which you transfer business or investment assets
  and then gift and/or sell at a discount, fractional interests to family members.

There are a number of other ideas that may fit your needs and circumstances. If you would like to
discuss which are designed to fit your particular circumstances, I shall be pleased to discuss them with
you.