Preservation | Family Wealth Protection & Planning

On Dec. 22, 2017, President Trump signed into law what is commonly known as the Tax Reform and Jobs Act of 2017 (2017 Act). As explained in more detail below, the 2017 Act increased the estate, gift, and generation-skipping transfer (GST) tax exemptions. This legislation expires at the end of 2025 and the tax laws will revert to where they stood prior to the 2017 Act unless Congress makes additional changes before then.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for February 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for February 2018:

How many times have you prepared your income tax returns for the previous year, only wishing you knew then what you know now, so you could go back and make more advantageous tax decisions? In most cases, you are stuck with the decisions you made before the new tax year began, even though you may not have all of the relevant tax information available to assist with those decisions until several months into the new tax year. Too bad for you, says the IRS, unless you are an estate or trust.

It is common for clients to have established a long-lasting relationship with one or more investment advisors over their lifetime. This relationship is so strong that in their eventual demise, they would like for the advisor to continue to provide services for the client’s assets that may be held in trust for successive generations. However, at the same time, the client may recognize that the most appropriate person to make decisions with respect to distributions, and matters other than investment decisions, is a corporate trustee. Commonly, the investment advisor cannot serve as trustee even if naming an individual is desirable.