Estate Tax Planning
LOREH explores with clients way to reduce their taxable estate - and their estate taxes. We explain commonly used strategies for removing assets from your estate which involve annual tax free-gifts and the use of irrevocable life insurance trusts, qualified personal residence trusts, family limited partnerships, limited liability companies, charitable remainder trusts, and charitable lead trust.
For example, both a limited liability company (LLC) and a family limited partnership (FLP) let you reduce estate taxes by transferring assets like a family-owned business, real estate or stock to your children now - but you keep control. They can also protect the assets from future lawsuits and creditors.
In addition, FLPs and LLCs can help minimize estate and gift taxes through fractionalizing the ownership of business assets or real estate to take advantage of valuation discounts which significantly reduce transfer taxes.
Discounts are reductions in the value of the underlying asset as a result of being held by an FLP or LLC, as seen in the following example: Taxpayer owns real estate worth $1 million and contributes it to an FLP and LLC. He then gifts 10 percent interest to each of his children. Since each child will have a non-controlling and difficult-to-market interest, gifted interest may be valued for, say $65,000 instead of $100,000.
LOREH also helps clients with appropriate estate tax planning provisions in their wills and trusts to insure maximum use of the unlimited marital deduction and the maximum use of their federal gift/estate tax exemption.
