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1 Valuation Opportunities in Estate & Gift Taxation Business Valuation Workshop LCPA-Lafayette November 6, 2009 Vanessa Claiborne Chaffe & Associates,

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Presentation on theme: "1 Valuation Opportunities in Estate & Gift Taxation Business Valuation Workshop LCPA-Lafayette November 6, 2009 Vanessa Claiborne Chaffe & Associates,"— Presentation transcript:

1 1 Valuation Opportunities in Estate & Gift Taxation Business Valuation Workshop LCPA-Lafayette November 6, 2009 Vanessa Claiborne Chaffe & Associates, Inc. Miriam Henry Jones Walker

2 2 Wealth Transfer Opportunities Todays Investment Environment Todays Investment Environment Background on Estate Tax Background on Estate Tax Loans Loans GRATs GRATs Sale to a Grantor Trust Sale to a Grantor Trust Benefits of Gifting during a Market Downturn Benefits of Gifting during a Market Downturn Qualified Personal Residence Trust Qualified Personal Residence Trust Charitable Lead Annuity Trust Charitable Lead Annuity Trust Lawyerly Disclosures Lawyerly Disclosures

3 3 Todays Investment Environment

4 4 Historically, significant market declines have been followed by substantial recoveries Historically, significant market declines have been followed by substantial recoveries 1987 Financial Panic 1987 Financial Panic 1998 Long Term Capital Management Crisis 1998 Long Term Capital Management Crisis 2002 Tech Bubble Bust 2002 Tech Bubble Bust

5 5 Todays Investment Environment cont…

6 6 S&P REIT Index

7 7 S&P Oil & Gas Equipment Select Industry Index

8 8 Background on Estate Tax

9 9 The U.S. Estate Tax (as we know it today) The estate tax exemption is: The estate tax exemption is: $3.5 million for 2009 $3.5 million for 2009 The rate is 45% The rate is 45% The estate tax exemption amount is reduced by taxable gifts made during life The estate tax exemption amount is reduced by taxable gifts made during life You can use $1 million of your exemption with lifetime gifts You can use $1 million of your exemption with lifetime gifts

10 10 What is Subject to U.S. Estate Tax? All property owned at death. All property owned at death. Includes non-probate assets like 401(k), IRA, assets held in a revocable trust (e.g. a living trust). Includes non-probate assets like 401(k), IRA, assets held in a revocable trust (e.g. a living trust). Assets donated during life if decedent retains control. Assets donated during life if decedent retains control. Life insurance owned by the decedent. Life insurance owned by the decedent. QTIP assets from a predeceased spouses estate QTIP assets from a predeceased spouses estate

11 11 What Deductions are Available? Debts & administrative expenses. Debts & administrative expenses. Charitable gifts at death. Charitable gifts at death. Outright transfers to spouse and other qualified transfers to spouse - e.g. QTIP trust or usufruct for life to spouse. Outright transfers to spouse and other qualified transfers to spouse - e.g. QTIP trust or usufruct for life to spouse. Deductions must be qualified. Deductions must be qualified.

12 12 State Inheritance/Estate Tax Louisiana has none. Louisiana has none. But, if you own property in other states, find out if they have a state death tax and plan to avoid it (titling asset in an entity or trust may do it). But, if you own property in other states, find out if they have a state death tax and plan to avoid it (titling asset in an entity or trust may do it).

13 13 U.S. Gift Tax A tax on lifetime gifts. A tax on lifetime gifts. You can use up to $1 million of your exemption during life. You can use up to $1 million of your exemption during life. You can make annual exclusion gifts of $13,000 per year per donee -- without using exemption. You can make annual exclusion gifts of $13,000 per year per donee -- without using exemption. Tuition payments are excluded and do not use up exemption - but donor must pay the school directly. Tuition payments are excluded and do not use up exemption - but donor must pay the school directly. Medical expenses are the same and, again, donor must pay the health care provider directly. Medical expenses are the same and, again, donor must pay the health care provider directly. Louisiana has no gift tax. Louisiana has no gift tax.

14 14 U.S. Generation-Skipping Transfer Tax An additional tax on top of gift or estate tax on transfers that skip a generation. An additional tax on top of gift or estate tax on transfers that skip a generation. Each donor has a GST tax exemption equal to the estate tax exemption amount - but these are separate exemptions. Each donor has a GST tax exemption equal to the estate tax exemption amount - but these are separate exemptions. The GST tax rates is 45% The GST tax rates is 45% The rates apply in addition to gift/estate taxes. The rates apply in addition to gift/estate taxes. Louisiana does not have a GST tax. Louisiana does not have a GST tax. Generally, if a lifetime gift is exempt from gift tax, it is exempt from GST tax. Generally, if a lifetime gift is exempt from gift tax, it is exempt from GST tax.

15 15 Income Tax If you give low basis assets away during your life, the donee takes your basis and must pay capital gain upon sale. If you give low basis assets away during your life, the donee takes your basis and must pay capital gain upon sale. Legatees/heir take basis established at death - often a stepped up basis. Legatees/heir take basis established at death - often a stepped up basis. IRD - Income in Respect of Decedent - if you leave property that includes taxable (but not yet taxed) income, the legatee will pay income tax on the income (e.g. IRA/401(k)). IRD - Income in Respect of Decedent - if you leave property that includes taxable (but not yet taxed) income, the legatee will pay income tax on the income (e.g. IRA/401(k)). Think about the income tax impact when making gift decisions -- income tax can reduce the value of the gift substantially. Think about the income tax impact when making gift decisions -- income tax can reduce the value of the gift substantially. Consider using IRD items to fund charitable gifts at death -- the charity doesnt pay income tax. Consider using IRD items to fund charitable gifts at death -- the charity doesnt pay income tax.

16 16 Income Tax Issues The income received by the GRAT, even amounts in excess of the required annuity payments to the grantor, will all be taxed to the grantor. The income received by the GRAT, even amounts in excess of the required annuity payments to the grantor, will all be taxed to the grantor. That is, the grantor will have to use a portion of the annuity payments, or other funds, to make the necessary income tax payments. That is, the grantor will have to use a portion of the annuity payments, or other funds, to make the necessary income tax payments. Being required to pay the income tax on the entire income of a GRAT can be an another estate planning advantage. Being required to pay the income tax on the entire income of a GRAT can be an another estate planning advantage. These tax payments are essentially tax-free gifts from the grantor to the beneficiaries of the GRAT. These tax payments are essentially tax-free gifts from the grantor to the beneficiaries of the GRAT.

17 17 The Easy Stuff Dont die intestate - you cant get a marital deduction in Louisiana for the intestate usufruct. Dont die intestate - you cant get a marital deduction in Louisiana for the intestate usufruct. Make annual exclusion gifts - cash or high basis securities, other assets with high potential for appreciation. Make annual exclusion gifts - cash or high basis securities, other assets with high potential for appreciation. Pay tuitions and medical expenses (and pay the school/provider directly). Pay tuitions and medical expenses (and pay the school/provider directly). Consider a power of attorney. Consider a power of attorney. Make charitable gifts. Make charitable gifts. Spend your money! Spend your money!

18 18 Loans

19 19 Loans The IRS permits relatives to lend money to one another at the Applicable Federal Rate, which the government sets monthly. The IRS permits relatives to lend money to one another at the Applicable Federal Rate, which the government sets monthly. With these, relatives can charge far less than a bank or other 3 rd party lenders. With these, relatives can charge far less than a bank or other 3 rd party lenders.

20 20 Example Loan Loan $1 million $1 million 30 yr mortgage 30 yr mortgage Interest 6.5% 3 rd party lender or 4.10% AFR Interest 6.5% 3 rd party lender or 4.10% AFR Interest paid over term of loan Interest paid over term of loan $1.3 million with 6.5% interest $1.3 million with 6.5% interest $756,000 with 4.10% interest $756,000 with 4.10% interest Parents are transferring $544,000 tax free to kids over 30 years Parents are transferring $544,000 tax free to kids over 30 years

21 21 GRATs Grantor Retained Annuity Trusts

22 22 GRATs How Does a GRAT Work? How Does a GRAT Work? When Would a GRAT be a Good Strategy? When Would a GRAT be a Good Strategy? What Does a GRAT Accomplish? What Does a GRAT Accomplish? GRAT Examples GRAT Examples

23 23 How Does a GRAT Work? Grantor transfers assets to trust Grantor transfers assets to trust Grantor receives an annuity stream for a set term Grantor receives an annuity stream for a set term Term is chosen by the grantor Term is chosen by the grantor Annuity stream is typically either cash or in kind Annuity stream is typically either cash or in kind Grantor pays little or no gift tax, or uses gift tax exemption, on present value of trust remainder Grantor pays little or no gift tax, or uses gift tax exemption, on present value of trust remainder Gift tax exemption as of 2009 $1,000,000 per grantor Gift tax exemption as of 2009 $1,000,000 per grantor

24 24 How Does a GRAT Work? cont… When trust term ends, remaining trust assets pass to beneficiaries free of gift tax When trust term ends, remaining trust assets pass to beneficiaries free of gift tax If grantor does not survive the term, trust assets are included in the estate and subject to estate tax If grantor does not survive the term, trust assets are included in the estate and subject to estate tax

25 25 How Does a GRAT Work? cont… Source: J.P. Morgan

26 26 When Would a GRAT be a Good Strategy? The assets in a portfolio are appreciating rapidly and/or producing high income. The assets in a portfolio are appreciating rapidly and/or producing high income. The assets transferred can be discounted pursuant to general valuation principles. The assets transferred can be discounted pursuant to general valuation principles. Grantor wants to retain income stream from those assets. Grantor wants to retain income stream from those assets. Grantor wishes to minimize estate or gift taxes on the transfer of wealth to beneficiaries. Grantor wishes to minimize estate or gift taxes on the transfer of wealth to beneficiaries.

27 27 What Does a GRAT Accomplish? A GRAT accomplishes the following: A GRAT accomplishes the following: Freezes the value of gifted assets so that their future appreciation will not be subject to transfer tax Freezes the value of gifted assets so that their future appreciation will not be subject to transfer tax Retains the use of the assets for a period of time. Retains the use of the assets for a period of time. Discounts the value of the gift for gift tax purposes. Discounts the value of the gift for gift tax purposes. In a low interest rate environment, a GRAT provides a great opportunity to shift future appreciation to beneficiaries. In a low interest rate environment, a GRAT provides a great opportunity to shift future appreciation to beneficiaries.

28 28 Planning Short-term GRATs Short-term GRATs A short-term GRAT minimizes the change that a year or two of poor performance will adversely affect the overall effectiveness of the GRAT A short-term GRAT minimizes the change that a year or two of poor performance will adversely affect the overall effectiveness of the GRAT Long-term GRATs Long-term GRATs Allows the annuity payments to be less each year when designing a zeroed-out GRAT Allows the annuity payments to be less each year when designing a zeroed-out GRAT Using Increasing Annuity Amounts Using Increasing Annuity Amounts Allows for lower payments in earlier years and larger payments later. Allows for lower payments in earlier years and larger payments later.

29 29 GRAT Examples

30 30 Example 1 The gift element is entirely eliminated if the gift is zeroed out (i.e. there is no gift if the actuarial value of the grantors interest equals the full value of the property transferred to the trust) The gift element is entirely eliminated if the gift is zeroed out (i.e. there is no gift if the actuarial value of the grantors interest equals the full value of the property transferred to the trust)

31 31 Example 1 cont… Grantor (G) transfers property worth $1 million to a GRAT that will pay G $118,430 per year for a term of 10 yrs at the end of which the GRAT will terminate and the property will be distributed to Gs children. Grantor (G) transfers property worth $1 million to a GRAT that will pay G $118,430 per year for a term of 10 yrs at the end of which the GRAT will terminate and the property will be distributed to Gs children. If the assumed AFR was 3.2% at the time the GRAT is created, the value of the annuity that G retained interest will be roughly equal to the full value of the property that G transferred to the GRAT. (i.e. the GRAT is zeroed out) If the assumed AFR was 3.2% at the time the GRAT is created, the value of the annuity that G retained interest will be roughly equal to the full value of the property that G transferred to the GRAT. (i.e. the GRAT is zeroed out) For gift tax purposes, the creation of the GRAT does not involve a gift. For gift tax purposes, the creation of the GRAT does not involve a gift.

32 32 Example 1 cont… Note that if the grantor survives the term of the zeroed-out GRAT, the GRAT will have property available for distribution only to the extent the property in the GRAT appreciates at a rate greater than the rate (3.4%) that was assumed when the GRAT was created. Note that if the grantor survives the term of the zeroed-out GRAT, the GRAT will have property available for distribution only to the extent the property in the GRAT appreciates at a rate greater than the rate (3.4%) that was assumed when the GRAT was created. If G survives the retained term, his children will receive the property (if any) then held in the GRAT. If G survives the retained term, his children will receive the property (if any) then held in the GRAT. If the property generates an annual return of at least 15%, Gs children will receive the entire principal of the trust, which itself may have increased dramatically in value over the term of the GRAT. If the property generates an annual return of at least 15%, Gs children will receive the entire principal of the trust, which itself may have increased dramatically in value over the term of the GRAT. At an 8% growth rate, G. children receive $443,281 At an 8% growth rate, G. children receive $443,281

33 33 Example 1 cont…

34 34 Example 2 Interest rate: 3.2% Interest rate: 3.2% Term: 10 years Term: 10 years Transfer to Trust: $5 million Transfer to Trust: $5 million Beg. Annuity: $238,722 Beg. Annuity: $238,722 Annuity Growth Rate: 20% Annuity Growth Rate: 20% Assumed Asset Growth Rate: 8% Assumed Asset Growth Rate: 8% Value of Annuity: $4,999,985 Value of Annuity: $4,999,985 Taxable Gift: $15.45 Taxable Gift: $15.45 Value of Assets at End of GRAT Term: $2,771,951 Value of Assets at End of GRAT Term: $2,771,951

35 35 Example 3 Interest rate: 3.2% Interest rate: 3.2% Term: 10 years Term: 10 years Transfer to Trust: $5 million Transfer to Trust: $5 million Beg. Annuity: $238,722 Beg. Annuity: $238,722 Annuity Growth Rate: 20% Annuity Growth Rate: 20% Assumed Asset Growth Rate: 5% Assumed Asset Growth Rate: 5% Value of Annuity: $4,999,984 Value of Annuity: $4,999,984 Taxable Gift: $15.45 Taxable Gift: $15.45 Value of Assets at End of GRAT Term: $882,801 Value of Assets at End of GRAT Term: $882,801

36 36 Example 4 Interest rate: 3.2% Interest rate: 3.2% Term: 10 years Term: 10 years Transfer to Trust: $5 million Transfer to Trust: $5 million Beg. Annuity: $238,722 Beg. Annuity: $238,722 Annuity Growth Rate: 20% Annuity Growth Rate: 20% Assumed Asset Growth Rate: 0% Assumed Asset Growth Rate: 0% Value of Annuity: $4,999,984 Value of Annuity: $4,999,984 Taxable Gift: $15.45 Taxable Gift: $15.45 Value of Assets at End of GRAT Term: $0.00 Value of Assets at End of GRAT Term: $0.00

37 37 Sale to a Grantor Trust

38 38 Sale to a Grantor Trust Settlor establishes a funded "grantor" trust and sells assets to the trust for a note. Settlor establishes a funded "grantor" trust and sells assets to the trust for a note. A "grantor" trust is a trust with a certain tax status that treats the settlor as the owner for income tax purposes. Because the grantor is selling the assets to a grantor trust, there is no income / capital gains tax on the sale. If the assets are sold during the term of the trust, the settlor pays the capital gain; the settlor picks up all the tax on the income during the term of the trust. A "grantor" trust is a trust with a certain tax status that treats the settlor as the owner for income tax purposes. Because the grantor is selling the assets to a grantor trust, there is no income / capital gains tax on the sale. If the assets are sold during the term of the trust, the settlor pays the capital gain; the settlor picks up all the tax on the income during the term of the trust. The trust should be funded with sufficient assets to secure the note and provide economic support for the loan. Funding usually requires a gift by the settlor. The trust should be funded with sufficient assets to secure the note and provide economic support for the loan. Funding usually requires a gift by the settlor. Goal: freeze the value of the assets transferred as of the date of transfer to avoid inclusion of appreciation in the settlor's estate. Goal: freeze the value of the assets transferred as of the date of transfer to avoid inclusion of appreciation in the settlor's estate.

39 39 Illustration of Sale to a Grantor Trust Grantor owns 15,000 shares of stock valued at $1,000 share ($15,000,000) Grantor owns 15,000 shares of stock valued at $1,000 share ($15,000,000) Spouse owns 3,000 shares ($3,000,000) Spouse owns 3,000 shares ($3,000,000) Grantor donates $500,000 of stock to multigenerational grantor trust Grantor donates $500,000 of stock to multigenerational grantor trust Grantor sells $4.5 million of stock to grantor trust for a note Grantor sells $4.5 million of stock to grantor trust for a note October 2009 AFR of 2.66% October 2009 AFR of 2.66%

40 40 Illustration of Sale to a Grantor Trust Company projects FMV and Dividends to increase at 15% per year for 2010, 2011 and 2012 Company projects FMV and Dividends to increase at 15% per year for 2010, 2011 and 2012 Thereafter, 10% growth is projected Thereafter, 10% growth is projected

41 41 Illustration of Sale to Grantor Trust 7 years later 7 years later FMV of trust assets increase from $500,000 to $9.67 million as debt is paid and FMV of stock and dividends build FMV of trust assets increase from $500,000 to $9.67 million as debt is paid and FMV of stock and dividends build $4.1 million of estate taxes saved $4.1 million of estate taxes saved Grantor and spouse receive $4.99 million in payments from the trust Grantor and spouse receive $4.99 million in payments from the trust Grantor and spouse pay all income tax on trust dividends (including upon a sale of the company) Grantor and spouse pay all income tax on trust dividends (including upon a sale of the company)

42 42 Benefits of Gifting During a Market Downturn

43 43 Discounted Assets The contribution of discounted assets to a GRAT may make the GRAT more effective. The contribution of discounted assets to a GRAT may make the GRAT more effective. For example, the grantor may decide to contribute a minority interest in the grantors family LLC or LP. For example, the grantor may decide to contribute a minority interest in the grantors family LLC or LP. Often appraisers value such interests on a discounted basis. Often appraisers value such interests on a discounted basis.

44 44 Discounted Assets cont… The valuation of the interest is significantly less than such interests pro rata share of the total assets of such company. The valuation of the interest is significantly less than such interests pro rata share of the total assets of such company. Nevertheless, such a contributed interest is entitled to a pro rata share of the earnings and growth of the company. Nevertheless, such a contributed interest is entitled to a pro rata share of the earnings and growth of the company. This may result in the percentage growth experienced by the GRAT being significantly greater than that experienced by the entire company. This may result in the percentage growth experienced by the GRAT being significantly greater than that experienced by the entire company.

45 45 LLC Example 1 Assume G owns a building with a FMV of $10 million. Assume G owns a building with a FMV of $10 million. The building generates $1MM/yr in rent and is expected to appreciate at 5%/yr The building generates $1MM/yr in rent and is expected to appreciate at 5%/yr G transfers the building to an LLC G transfers the building to an LLC

46 46 LLC Example 1 cont… Grantor obtains an appraisal of a 33% interest in the LLC. Grantor obtains an appraisal of a 33% interest in the LLC. After a 40% discount for lack of control and marketability, the value was $2MM ($10MM X 33.33% X 40%) After a 40% discount for lack of control and marketability, the value was $2MM ($10MM X 33.33% X 40%)

47 47 LLC Example 1 cont… Interest Rate: 3.2% Interest Rate: 3.2% Term: 10 years Term: 10 years Transferred to Trust: $2 million Transferred to Trust: $2 million Beginning Annuity: $95,489 Beginning Annuity: $95,489 Annuity Growth Rate: 20% Annuity Growth Rate: 20% Assumed Asset Growth Rate: 15% Assumed Asset Growth Rate: 15% Value of Annuity: $2 million Value of Annuity: $2 million Taxable Gift: $1.99 Taxable Gift: $1.99 Value of Assets at End of GRAT Term: $3,992,386 Value of Assets at End of GRAT Term: $3,992,386

48 48 LLC Example 2 Interest Rate: 3.2% Interest Rate: 3.2% Term: 5 years Term: 5 years Transferred to Trust: $2 million Transferred to Trust: $2 million Beginning Annuity: $298,471 Beginning Annuity: $298,471 Annuity Growth Rate: 20% Annuity Growth Rate: 20% Assumed Asset Growth Rate: 25% Assumed Asset Growth Rate: 25% Value of Annuity: $1,999,995 Value of Annuity: $1,999,995 Taxable Gift: $5.52 Taxable Gift: $5.52 Value of Assets at End of GRAT Term: $2,740,118 Value of Assets at End of GRAT Term: $2,740,118

49 49 Operating Company Example The following is an illustration of benefits of discounting partial interests and gifting equity interests in a private company during a market downturn The following is an illustration of benefits of discounting partial interests and gifting equity interests in a private company during a market downturn

50 50 Operating Company Example Dad owns 80% of the business Dad owns 80% of the business Junior and Sissy each own 10% Junior and Sissy each own 10% In 2007, business was worth $10 million on a control basis. In 2007, business was worth $10 million on a control basis. Now it is worth $8 million. Now it is worth $8 million. Dad donates 20% of the equity to each child. Dad donates 20% of the equity to each child. No taxes are due because Dad uses his lifetime exclusion. No taxes are due because Dad uses his lifetime exclusion.

51 51 Operating Company Example Now, each child owns 30% and Dad owns 40%, putting all three in a minority position. Now, each child owns 30% and Dad owns 40%, putting all three in a minority position. 1) 20% interest in the business at control level in 2007 was $1MM. Gift to each child in 2009 has a fair market value of $420K. If value recovers to 2007 level, in 2011 $580K will have been transferred to each child tax free. At a marginal tax rate of 45%, savings are 2 donees x $580K x 45%=$261,000

52 52 Operating Company Example 2) Dads ownership interest goes from a control level to a nonmarketable, minority level. At a marginal tax rate of 45%, savings are …

53 53 Operating Company Example

54 54 Operating Company Example

55 55 Qualified Personal Residence Trust (QPRT)

56 56 Qualified Personal Residence Trust (QPRT) Donor transfers personal residence (often a vacation home) to qualified trust for a term; at the end of the term the principal beneficiaries receive the property. Donor transfers personal residence (often a vacation home) to qualified trust for a term; at the end of the term the principal beneficiaries receive the property. Donor makes a gift of the value of the remainder interest only -- the actuarial value of the donor's retained right to use the property for ten years reduces the value of the gift. Donor makes a gift of the value of the remainder interest only -- the actuarial value of the donor's retained right to use the property for ten years reduces the value of the gift. Goal: transfer asset for a lower transfer- tax cost; move appreciation out of donor's estate. Goal: transfer asset for a lower transfer- tax cost; move appreciation out of donor's estate.

57 57 QPRT Example A $1 million vacation home is transferred A $1 million vacation home is transferred 3.2% government interest rate applies 3.2% government interest rate applies The trust has a 10-year term and the donor is 65 The trust has a 10-year term and the donor is 65 The value of the gift is approximately $573,020 The value of the gift is approximately $573,020 At the end of the 10-year term, the property is worth $3 million, and at the donor's death 10 years later it is worth $5 million At the end of the 10-year term, the property is worth $3 million, and at the donor's death 10 years later it is worth $5 million

58 58 Charitable Lead Annuity Trusts (CLAT)

59 59 Charitable Lead Annuity Trusts (CLAT) Charity receives an income stream (either a fixed dollar amount or a fixed percentage of the value of assets) paid annually for life or a term. Charity receives an income stream (either a fixed dollar amount or a fixed percentage of the value of assets) paid annually for life or a term. At the termination of the income interest, family beneficiary receives the remaining principal. At the termination of the income interest, family beneficiary receives the remaining principal. CLTs may be established during life or at death. CLTs may be established during life or at death. The remainder interest is valued actuarially, as with a GRAT or QPRT. The remainder interest is valued actuarially, as with a GRAT or QPRT.

60 60 CLAT Example $2 million is transferred into a CLAT with PETA (People for the Ethical Treatment of Attorneys) as the donee $2 million is transferred into a CLAT with PETA (People for the Ethical Treatment of Attorneys) as the donee Interest rate: 3.2% Interest rate: 3.2% Annual Annuity: $140,000 (7%) Annual Annuity: $140,000 (7%) Term is 15 yrs. Total annual return 8% Term is 15 yrs. Total annual return 8% PETA receives: $2.1 MM PETA receives: $2.1 MM Donor uses $352,620 of gift tax exemption Donor uses $352,620 of gift tax exemption Family Beneficiaries receive $2.54 MM at end of term Family Beneficiaries receive $2.54 MM at end of term Income and capital gain tax advantages Income and capital gain tax advantages

61 61 Lawyerly Disclaimers Dont try this at home. Dont try this at home. Weve covered the bare basics only. Weve covered the bare basics only. Every family has a different situation and needs its own plan. Every family has a different situation and needs its own plan. The numbers Ive used for examples are rounded, and will be different when applied to your family. The numbers Ive used for examples are rounded, and will be different when applied to your family. Tax laws are always changing. Tax laws are always changing.

62 62 IRS Circular 230 Disclaimer: IRS Circular 230 Disclaimer: Pursuant to Treasury guidelines, any tax advice contained in this communication (or any attachment) does not constitute a formal opinion. Accordingly, any tax advice contained in this communication (or any attachment) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be asserted by the Internal Revenue Service. Pursuant to Treasury guidelines, any tax advice contained in this communication (or any attachment) does not constitute a formal opinion. Accordingly, any tax advice contained in this communication (or any attachment) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be asserted by the Internal Revenue Service.

63 63 Finally … Yes, estate planning is expensive. Yes, estate planning is expensive. But, good planning should bring great value to your family – in terms of tax dollars saved and family goals met. But, good planning should bring great value to your family – in terms of tax dollars saved and family goals met. Sooner is better. Sooner is better. Extremely low market values make this an opportune time to transfer. Extremely low market values make this an opportune time to transfer.

64 64 Questions?

65 201 St. Charles Ave. Suite 1410 New Orleans, LA (504) St. Charles Ave. Suite 5100 New Orleans, LA (504)


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