Out of the Estate but Not Out of Reach – Flexible Trust Funding Techniques Providing Indirect Future Access
Speakers: Michael Fontanini MT, CFP®, CLU®
Year: 2020
Body of Knowledge:
Estate Planning/Wealth Transfer,
Estate and Gift Tax Rule,
Techniques
Competence: Technical |
Level: Broad |
Session Rating: 4.23
A heralded outcome of the Tax Cuts & Jobs Act of 2017 (“TCJA”) was the doubling of the federal transfer tax exemption per donor from $5,000,000 to $10,000,000, indexed for inflation ($11,400,000 in 2019). Absent further legislation, this TCJA provision will sunset after 12/31/2025 giving rise to an urgency for high net worth individuals to consider making substantial gifts to their beneficiaries free of gift tax prior to this sunset date, or otherwise risk losing the opportunity. Attempting to convince even those that can afford to transfer $23 million to an irrevocable trust, though, may be met with resistance because of the perceived loss of control and access to those funds. This presentation will focus on several techniques that can achieve the transfer tax benefits of gifting but provide flexibility for the grantor(s) to indirectly access trust property if circumstances change and help make it more acceptable to “write the check” now. “Gifting” away does not have to mean “giving” away!