The discounting of family assets held in partnerships and LLCs is a long-standing estate planning technique. The discounts on illiquid and hard-to-value assets can significantly reduce a family’s estate tax liability and transfer more of the family’s wealth to future generations. However, the IRS is looking closely at the underlying assets held in these legal structures to see if such discounting arguments really hold validity.
Discounts for underlying investments which are easy to value, such as publicly-traded stocks, will likely receive tighter rules and greater scrutiny very soon.
As this excellent article from Paul Sullivan at the New York Times notes, those considering using these discounting strategies should act quickly – new IRS guidelines are expected in mid-September. Since Nevada is considered by many in the legal profession to have the best trust laws in the country, Alliance Trust is very familiar with these estate planning techniques. Please call Alliance Trust Company in Reno at 775-297-4000 for more information.
