2017 Tax Reform Act Creates Estate Planning Opportunities

The window for historical estate planning exclusions is open. For now…

On December 22nd, President Donald Trump signed the 2017 Tax Reform Act into law doubling the estate and gift exclusion, and generation-skipping transfer (GST) exemption amounts. This is the most significant tax reform since 1986.

How the 2017 Tax Reform Act Affects Your Estate Planning Strategies

The 2017 Tax Reform Act doubles the lifetime gift and estate exclusion (The 2018 Unified Exemption) and GST tax exemption from $5 million to $10 million with the intention of adjusting for inflation. However, in 2026, the lifetime gift and estate exclusion and GST tax exemption drop back to their base amount of $5 million.

If you accept the fact that taxes are political, and that politics are cyclical, then it follows that the estate tax is indeed likely to be reduced at some point in the future. Indeed, as recently as 1997 under the Clinton Administration the estate tax was level was just $600,000. For those who follow football more than politics, that was when Tom Brady was a QB at Michigan.

While the 2018 Unified Exemption is slated to sunset in 2026, the exemption is vulnerable to change.

The time to take advantage of the new 2017 Tax Reform Act exemptions is now.

Lifetime Gift and Estate Exclusion and GST Tax Exemption Amounts: Then and Now

Before the 2017 Tax Reform Act

The inflationary adjustments in the new tax law increase the base $5 million to $5.49 million for the tax year 2017. Before the Act, the 2018 exclusion amount was set at $5.6 million for inflationary adjustments. The estate, gift, and GST tax rates are 40%.

After the 2017 Tax Reform Act

Doubling the base exclusion amount to $10 million while adding the adjustment for inflation increases the lifetime gift and estate exclusion and GST exemption to a staggering $11.2 million for the tax year 2018. The amount doubles for married couples to $22.4 million. The estate, gift, and GST tax rates remain at 40%.

So What

With a historical combination of events, the 2017 Tax Reform Act creates a window of opportunity  in the estate planning arena:

  • Tax exemptions double the $5.6 million in 2017 to $10.98 million in 2018 per person (not per household)
  • New exemptions are scheduled to sunset back to $5 million in 2026
  • Ability to combine the new exemption increases with existing discounting methods available under IRS 2704

To put into perspective how historically advantageous the new estate tax laws are, in 2001 (less than 20 years ago) the estate tax exclusion amount was $675,000 with a maximum tax rate of 55%. Bumping the estate tax exclusion amount to over $11 million holding a maximum federal estate tax rate of 40% makes reviewing your existing estate planning strategies to leverage the new laws prudent and necessary.

Especially Advantageous In Nevada

The 2018 Tax Reform Act carries massive impacts on estate planning and highlights the advantages of Nevada as a situs for your trust. With a substantial demographic wave now heading into retirement, estate planning is on the minds of many Americans. And, they have just been presented with a unique, temporary opportunity to leverage Nevada Trust Laws for even more significant family benefits.

Gifts into a Nevada Dynasty Trust for your family can grow outside of your estate now and for generations to come. An added advantage is Nevada’s ironclad asset protection laws. Nevada Asset Protection protects your assets from your beneficiaries’ creditors when properly structured.

Learn more about applying the 2017 Tax Reform Act to your estate planning strategies.

Alliance Trust Company of Nevada Moves to the Museum Tower in the Financial Hub of Reno

Quickly-Growing Nevada Trust Company Moves to Downtown Reno

After spending nearly a decade at our office on Kietzke Lane, Alliance Trust Company of Nevada has moved to a wonderful new location in downtown Reno. Our new office is in what is known as the “Museum Tower,” the former American headquarters of Porsche.

We founded Alliance Trust Company in 2005 and have experienced steady growth since. Our previous office space simply could not accommodate our growing business. We visited several attractive properties, but ultimately we knew the Porsche Building was where we needed to be.

The Advantages of Our New Office

This new office provides many benefits for Alliance Trust Company, as well as our clients. We now have more space for our team and our clients when they come to visit us, and the state-of-the-art facilities allow us to work more efficiently and provide a better atmosphere for our clients.

The biggest advantage of all is the location. As a Reno-based trust company, we feel it is important to be in the heart of Reno’s financial services district. Our new location is part of a hub of attorneys, CPAs, financial strategists, and insurance professionals, making it the perfect place for our clients and us.img_7981

Regarding the new location, the President of Alliance Trust Company, Greg Crawford said: “100 West Liberty Street is the unofficial headquarters of the Nevada Trust Industry, with numerous retail and private trust companies, as well as top CPAs and attorneys with trust expertise. We are also excited to be part of the redevelopment of downtown Reno.”

With plenty of room for expansion, and a perfect location to better serve their clients, Alliance Trust Company will enjoy their new office in downtown Reno for years to come.

According to Crawford, “The new and expanded space will accommodate the rapid domestic and international growth we see with Nevada trusts. The new office space is easy to find, and convenient for local area residents and out-of-town guests.”

Increased Demand for Nevada Trusts

Nevada has always been one of the best states for establishing a trust, but several factors have led to a significantly growing demand for Nevada trusts in recent years. As other states and international jurisdictions have tightened regulations on asset protection, Nevada has held firm in their trust-friendly legislation.

Thanks to changes in the OCED’s “Common Reporting Standards,” Alliance Trust has seen a rise in interest around Nevada trusts from international families. While more countries are taking measures to decrease privacy, Nevada is one of the few locations left in the world where the privacy of families is still respected and protected.

As the demand for Nevada trusts rapidly grows, Alliance Trust Company is more than happy to accommodate clients from our new office in the heart of Reno, Nevada – perhaps the best location in the world for asset protection.

The Government of Kazakhstan knows my retirement account balance?

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The New York Times “Room for Debate” opinion pages recently asked Gregory Crawford, The President of Alliance Trust Company in Reno to comment on the Panama Papers and the advantages of and lawful usages of shell companies.  In this piece, Greg notes that the vast majority of these companies are used legally, providing a layer of security and privacy for international families in an increasingly dangerous world.

The interest of non-US citizens using foreign grantor trusts in Nevada is increasing dramatically.  Many countries are now recklessly sharing highly-sensitive and otherwise confidential individual financial information with rogue governments around the world under the OCED’s “Common Reporting Standards.” This program, which thankfully the United States is not participating in, gathers and automatically exchanges individual  names, addresses, tax identification numbers, and financial account balances with the governments of Azerbaijan, Cameroon, China, Georgia, Indonesia, Kazakhstan, the Philippines, Russia, Senegal, Tunisia, and Uganda, to name a few.  Where the information might go from there, no one knows.   Many of these countries have Horrific human rights records and serious corruption issues.  Automatically sharing this data will undoubtedly expose law-abiding individuals to the risk of extortion, kidnapping or worse.  The United States should remain proudly “non-compliant” with the CRS and its efforts to violate personal privacy.

it is worth noting that the State of Nevada offers excellent privacy provisions when establishing business entities such as LLCs, and there are options for the US and non-US citizens to keep their financial affairs private in trust.  Please contact Alliance Trust for more information at 775-297-4000.

 

Awareness of NING Trusts Growing Nationally

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Nevada Incomplete Non-Grantor Trusts (or, “NINGs”) are growing in popularity and usage across the country.  NINGs provide the grantor of the trust asset protection and the potential to minimize local and state income taxes on investable/intangible assets.  As this NASDAQ.com Article on NINGS, these types of trusts are not for everyone.

However, a family living in a high-income tax state with significant taxable income and appreciated investments (or investments expected to appreciate) can benefit from a NING. This is just one of many Nevada trust planning strategies that makes Nevada the Asset Protection Trust Rankings   If you are interested in learning more about NINGs, please read this Article by attorney Gordon Schaller and call Greg Crawford at Alliance Trust Company in Reno at 775-297-4684.

Your Family Inheritance Goes to Creditors, Predators and Bitter Ex-Spouses?!

A sad but familiar statistic was just released by CNBC this week, detailing that 38% of millionaire families in the US do not have an estate plan.  That means four of ten people reading this article have not taken the simple steps needed to protect their family’s future.  The article cites a variety of well-worn excuses, from the contact changes to the federal estate tax threshold to the natural reluctance to plan for and talk of your own demise.  The consequences of inaction are devastating to those left behind.  From the expense and hassles of probate, the courts naming guardians for minors, and to the very likely possibility that some or all of your assets are taken from the next generation by creditors, predictors and ex-spouses.  The reality is that with a little planning, these negative can be turned into a positive – leaving behind a legacy that helps many generations to come.  It is an old adage, but highly appropriate with this news.  The four often reading this article – all financially successful people –  haven’t planned to fail, they have failed to plan.  Nevada has the best trust laws in the country and has many estate planning strategies to better protect your family and potentially trim taxes.  You do not have to be a resident of Nevada to establish a Nevada trust.  For more information, call Greg Crawford at Alliance Trust Company in Reno at 775-297-4684.

Updating an Antiquated Family Trust in Nevada

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Many people are beneficiaries of family trusts that have antiquated terms and provisions that no longer make sense.  Yet many people also believe that they are “stuck” with the terms of the trust and that them simply have to live with the terms regardless moving forward.  This is not true.  Certain states, including Nevada, allow for modifications to be made to even an irrevocable trust.  Modifications can be made to extend the term of the trust, change the situs of the trust, and add or modify powers of appointment.  As this recent Forbes magazine article points out, you might even save taxes for the trust as part of this process.  Nevada is considered to have some of the best trust laws in the country and has very flexible statutes for modifying trusts.  For more information, call Greg Crawford in Reno at 775-297-4684.

Decanting an Irrevocable Trust in Nevada – Modernize an Irrevocable Trust

Many people believe that once a trust becomes irrevocable, that there is nothing you can do to change and fix outdated family trust provisions.  That is not correct.  Certain states,  including Nevada, have “decanting provisions” which allow for modifications of irrevocable trusts by shifting the assets from the old trust and into a new, modernized trust.  The new trust may have stronger asset protection and/or tax advantages.  The process leaves the unwanted trust provisions behind, like leaving sediment behind in decanting wine.  Decanting can be done quickly in Nevada, at a minimal cost.  Alliance Trust Company will be co-presenting a presentation at the Gathering in San Diego at the end of the month.  If you are looking at options to modify an irrevocable trust, you have a lot of options in Nevada you may not have in your home state.  Nevada is consider to have some of the best and most flexible trust laws in the country, and is consider one of the most favorable jurisdictions for decanting.  Please call Greg Crawford in Reno at 775-297-4684 for more information.

What a Trust Can Do for You and Yours

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A trust is an important part of almost every estate plan.  A trust is a much more cost-effective way to transfer property from one generation to the next.  A typical estate plan will include a packet of documents, including a revocable living trust and will, a financial power of attorney and an advance healthcare directive.  Together these documents make sure that your affairs are properly managed by someone you trust if you become incapacitated or pass away.  The advantages of a trust as opposed to a simple will are numerous:  your assets are transfer outside of probate (privacy), they are transferred faster and the administrative burdens on loved ones is minimized.  But what if you don’t have an obvious family member to serve as trustee?  A corporate trustee, such as Alliance Trust, can perform the same functions, utilizing a team of people with decades of experience to settle your estate.  In this article, tips for selecting a good corporate trustee are listed. Alliance Trust in Nevada offers trustee services in Nevada, which offers some of the best laws in the country for trusts and estate planning.

State of the Union to Propose Stealth Increase of Estate Taxes

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The Wall Street Journal and numerous other media outlets are reporting that the State of the Union address on Tuesday will outline a proposal by the President to effectively increase estate taxes.  In the proposal, appreciated assets in an estate would not receive an updated or “stepped up” tax basis on death.  Only a small amount of gains, suggested as $200,000 in portfolio assets and $500,000 in a primary residence would be shielded from tax.  Although these numbers may seem large, ask many families what their tax-cost basis is in desirable places to live, such as Silicon Valley and other parts of California, and you will see that this proposal would capture many more families with a taxable event on death even without a formal change to the estate tax rules.  There are many estate planning strategies that can help with families facing estate tax burdens.  Some of the best strategies use Nevada Trusts – the best state for asset protection and tax minimization.  Please call Greg Crawford in Reno at 775-297-4684 for more information.

Encore Presentation of Greg Crawford on Bulls n’ Bears

For those that missed the live broadcast, there will be an encore presentation of Alliance Trusts’ Greg Crawford discussing how Nevada evolved into the best state in the country for trusts, and business entity formation.  The show airs this Sunday at 9 pm on 99.1 FM in Reno.

What types of trusts are available in Nevada that aren’t in other states?  What trusts minimize local taxes?  Estate taxes?  Or better protect assets for your heirs?  If you are in Las Vegas or other parts of the country, tune in at this link.  A podcast should be available shortly.  For additional information, the well-regarded host of Bulls n’ Bears, Ken Roberts, recently wrote about NING trusts for the Lake Tahoe Tribune.

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