Just a month or two ago, the IRA proposed new regulations that will change how parents can pass on their wealth to their descendants. These regulations may terminate discounts on valuations that wealthy individuals and estate planners have relied on for decades. Also, these regulations may take effect as soon as New Years’ Day.
With New Regulations Looming, What Should You Do Now?
Fortunately, neither the regulations nor their effective date are permanently decided. This leaves individuals with a small opportunity to still implement the current (and better) strategy techniques that can save taxes and pass on more assets to loved ones.
Estate planning is ultimately an individualized process, so some options may work better for different business owners. Counseling with an estate planning attorney and a CPA is highly encouraged for these decisions. Some of these techniques include using a business entity to control your wealth in addition to other trusts. Other plans may include protecting your assets, protection against divorce, centrally managing your assets, and others. All these different options’ goals is to save on taxes.
Good planning at this complex level does take time, so you cannot begin this type of planning in December. So, with that in mind, what do you do?
Your Action Plan
You first need to review your current estate plan. You need to make sure that you understand what your estate plan does and that it addresses these issues. Starting from scratch or revising an already-existing plan can change what steps you take moving forward.
You then need to meet with an estate planning attorney to develop a strategy to address these 2704 regulation changes. A qualified estate planner will help you identify potential weaknesses that need improvement and create a strategy to correctly protect your family. There is still time to design your estate to minimize your tax liabilities and pass on your assets how you want to your loved ones.