We have been approached by a number of clients and/or their CPAs or financial advisors with the concern that the current huge exemption amounts (i.e., $11,580,000 gift/generation-skipping transfer/estate tax exemptions per person) may be reduced to somewhere between $3,500,00 to $6,000,000 under a Biden administration.  Even under current law, these exemption amounts will be halved after 2025.  Acting before such change in the law goes into effect (even acting this year for those who want to be safest) can easily save clients millions in potential estate and generation-skipping transfer taxes.

• Clients are therefore looking into creating and funding, before year end, a Completed Gift Trust (CGT).  The strategy is to transfer appreciating assets to a CGT so that assets can appreciate in value outside of the clients’ taxable estate using the current generous exemption amounts, so that such exemption amounts are permanently locked in through “grandfathering” (the IRS has declared they will allow such use of the exemption to stand, notwithstanding a later decrease in the exemption amounts).
• We have clients who have set up trusts in which the clients are also a beneficiary. This can be done with a CGT and clients can choose to either be a beneficiary now (a little more aggressive) or become a beneficiary at a later date as determined by a protector (a more conservative approach).
• The CGT can also be designed to take advantage of income tax rules so that the maximum deductions and more favorable tax brackets can be utilized (and in some cases, eliminating capital gain taxes).

If you have an interest in taking advantage of this advanced, highly-effective estate planning strategy, we encourage you to contact us at your earliest opportunity as we anticipate significant interest in the CGT strategy with a possible year-end deadline to act.

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