Today’s political and economic climate gives the high-net-worth individuals advantageous planning opportunities given the current exemption numbers. Today’s tax exemption numbers are beyond comprehension and the highest that they have ever been. When done correctly, the techniques used to create these estate plans in minimizing tax exposure and maximizing the individuals’ legacy are highly effective.
The story begins with years of hard work in the fields planting, tending, and establishing the initial vines. After a few years of hard effort, the path of harvesting the grapes began, and four generations later, this vineyard is now part of a historical winery. But you know that the most important part of this winery is not that it is part of a historical winery, but that it has deep rooted family history, your relatives having walked through these same doors, and generations of your family choosing to continue their efforts in passing down their legacy to the next generation.
This is why you know that the most important thing that you can do to preserve your family’s legacy and pass this on to your heirs, is to secure your estate plan. This is just one example of a family’s legacy. Your legacy might be different, however, the similarity is that you have worked very hard to maintain your family’s legacy, and we want to make sure that you are able to pass it on to the next generations with a plan that will not only minimizes tax exposure but maximizes your legacy.
Today, and until December 31st, 2025, you are able to shield $11.58 million to your heirs and pay no federal estate or gift tax. A couple can shield their combined exemption ($23.16 million). We know that the complexity of each situation calls for a different solution. One caveat, however, is the next Presidential election. As we cannot predict the outcome of the election, we simply cannot predict if the exemption numbers will remain in-tact. Depending on the outcome of the election, the exemption amount may go lower. Regardless, on January 1st, 2026 the exemption rates will revert to the $5 million level, (indexed for inflation).
In life, there are many things we cannot control. One thing we can control is where our assets end up. We are willing to bet that every single one of you would prefer to leave your hard-earned legacy to your heirs, or charity of choosing. It is vital to have the correct estate plan that will not only preserve but also grow your financial assets, and of course, continue building generational growth. Families wishing to pass on their assets to future generations should take steps before the current high temporary exemptions decline.
Life Insurance policies are an effective technique in passing wealth to your heirs. The value that Life Insurance can bring to an estate plan goes far beyond providing cash liquidity through the payment of death benefits. Diversification, guarantees (certain life insurance policies provide lifetime guaranteed lifetime protection), tax-advantaged death benefit and tax-deferred growth potential are just a few advantages to Life Insurance. One of the most common ways of using life insurance in wealth transfer is by using it in conjunction with an irrevocable trust. When the irrevocable trust is properly structured, the death benefit from a life insurance policy can provide liquidity to offset federal or state wealth transfer taxes. Developing a life insurance strategy today will help efficiently transfer guaranteed, tax-free cash along to the client’s heirs in the future. They can also help high net worth families hedge against risk, too, especially when placed in trust. Life insurance should be viewed not only as an asset within your overall portfolio but also as an investment alternative. Think of life insurance as being future money, and not as an expense.
Life Insurance is the time-tested solution of leveraging assets into dollars needed to pay future taxes so you can pass on what you’ve worked so hard to accumulate.
You may ask yourself, what makes Tax Efficient Solutions different? Our experience is important, but it’s our approach that makes us different. We negotiate the lowest possible cost by shopping the file out to over 40 top insurance carriers while at the same time negotiating the lowest bank rates should you decide to finance the premiums. We will use all of our expertise to implement a plan that works best for you and your family. Estate tax mitigation is a key element of estate planning, but in order to be effective in minimizing tax liability, it is vital to understand the criteria for imposing both estate and income taxes. Together, we can help provide powerful solutions and opportunities to help pursue the estate plan the fit your needs. We can lower your cost to ten cents on a dollar.