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Federal Estate and Gift Tax Exemptions set to increase in 2023

Due to built-in inflation adjustments to the Federal Estate and Gift Tax Exemptions, Taxpayers will have the opportunity to transfer more assets in 2023, free from the Federal Estate and Gift Tax. Here are some quick facts you should know:

  • In 2023, the Federal Estate Tax Exemption will jump to $12.92 million (up from $12.06 million in 2022), with all assets in excess of this exemption taxed at the rate of 40%.
  • The Annual Gift Tax Exclusion will jump to $17,000 per person, per year (up from $16,000 per person, per year in 2022). Gifts made using the Annual Gift Tax Exclusion do not reduce the Federal Estate Tax Exemption. Gifts made in excess of the Annual Gift Tax Exclusion reduce the Federal Estate Tax Exemption, dollar for dollar.
  • On January 1, 2026, absent legislative action, the Federal Estate Tax Exclusion is still set to sunset back to its pre-2018 level of $5 million, adjusted for inflation.
  • Be sure to check the estate tax laws in your state. Maryland residents continue to be taxed on estates in excess of $5 million at the rate of 16%.

What should you be doing now if you are likely to have a taxable estate?

    • Annual Exclusion Gifts – if made on a consistent basis, these gifts are extremely helpful in reducing your taxable estate.
    • Larger Gifts – to utilize the heightened Federal Estate Tax Exemptions prior to January 1, 2026. Keep in mind gifts “come off the bottom” of your exemption, not the top.  Therefore, a gift of $1 million will reduce your Federal Estate Tax Exemption by $1 million whether it is at $12.92 million (or $5 million, indexed for inflation).
    • Where to Gift (In Trust or Outright) – Gifts can be made to beneficiaries outright or alternatively into an Irrevocable Trust for creditor protection, future estate tax avoidance while retaining (if desired) a beneficiary’s control and access to the funds.
    • Prepare Your Estate for Gifting in advance of the Sunset
      • Prepare Irrevocable Trusts now to receive gifted assets in the future.
      • Transfer assets into LLCs, Partnerships or other closely held entities allowing for timely gifting, potentially on a discounted basis.
    • Value of Assets – Depressed market value of assets create a good opportunity for gifting.
    • Review of Estate Plan – It is always worthwhile to review your estate planning documents to ensure that (beyond taxation) your plan continues to meet your family’s goals.

To learn more about the impact of the Federal Estate and Gift Tax Exemption on your family’s estate and to determine the need for action in advance of any sunset or for a review of your current estate plan, please contact the professionals at Bagley & Rhody, P.C.

COVID-19 Updated Office Procedures – March 14, 2022

As the impact of COVID-19 evolves, our firm continues to update its operating procedures to protect the health and safety of our employees, their families, our clients, and friends.

We are no longer requiring masks to be worn inside our office.  We do encourage the unvaccinated and immunocompromised to stay masked.  We ask anyone with upper respiratory symptoms to reschedule any in-person meetings.

We continue to offer in-person meetings for clients subject to the following updated procedures that are in accordance with recommendations of the Anne Arundel County Department of Health:

  • All in-person meetings must be scheduled in advance.
  • All visitors are asked to use the hand sanitizer station just inside our front door upon entry.
  • If you are presenting with any COVID-19 symptoms or have tested positive for COVID-19; we request that you delay any in-person meeting for at least 10 days and you are asymptomatic and fever-free for 24 hours; or, in the alternative, schedule an online meeting or telephone conference.
  • If you have been exposed to anyone who has symptoms or has tested positive for COVID-19; or, if you have been to an area with a high rate of Covid-19 cases, we request that you delay any in-person meeting for at least 5 days if you are asymptomatic and fever-free; or, in the alternative, schedule an online meeting or telephone conference.

We hope you understand the need for taking the above precautions during this ongoing COVID-19 pandemic.  Certainly, if you have any questions, please do not hesitate to contact a member of the Bagley & Rhody team.

COVID-19 Office Procedures

As the impact of COVID-19 evolves, our firm continues to update its operating procedures to protect the health and safety of our employees, their families, our clients, and friends.

We are no longer requiring masks to be worn inside our office.  We do encourage the unvaccinated and immunocompromised to stay masked.  We ask anyone with upper respiratory symptoms to reschedule any in-person meetings.

We continue to offer in-person meetings for clients subject to the following updated procedures that are in accordance with recommendations of the Anne Arundel County Department of Health:

  • All in-person meetings must be scheduled in advance.
  • All visitors are asked to use the hand sanitizer station just inside our front door upon entry.
  • If you are presenting with any COVID-19 symptoms or have tested positive for COVID-19; we request that you delay any in-person meeting for at least 10 days and you are asymptomatic and fever-free for 24 hours; or, in the alternative, schedule an online meeting or telephone conference.
  • If you have been exposed to anyone who has symptoms or has tested positive for COVID-19; or, if you have been to an area with a high rate of Covid-19 cases, we request that you delay any in-person meeting for at least 5 days if you are asymptomatic and fever-free; or, in the alternative, schedule an online meeting or telephone conference.

We hope you understand the need for taking the above precautions during this ongoing COVID-19 pandemic.  Certainly, if you have any questions, please do not hesitate to contact a member of the Bagley & Rhody team.

Changes To President Biden’s Build Back Better Package

President Biden presented his revised framework for the Build Back Better reconciliation package this morning, eliminating the previously proposed revisions to the Federal Estate Tax laws that were part of the previous versions of the package, including  (1) the accelerated drop in the Federal Estate Tax Exemption from $11.7 million to $6 million beginning as of January 1, 2022, (2) the elimination of Intentionally Defective Grantor Trusts, and (3) the elimination of discounts for lack of control and lack of marketability on certain business interests.

Instead, the new tax reform package focuses on revenue generation through:

  • 15% Corporate Minimum Tax on Large Corporations
  • 1% Surcharge on Corporate Buy-Backs
  • Global Minimum Tax
  • Penalty for Foreign Corporations
  • Surtax on Multi-Millionaires and Billionaires
  • Close Medicare Self-Employment Tax Loophole
  • Continue Limitation on Excess Business Losses
  • Investing in IRS Enforcement

It is unclear whether this revised framework will garner the votes necessary to get through Congress and whether the estate tax is revisited as a target for tax reform in the future.  At least for now, the President’s revised package provides welcome relief to many clients that were working to complete significant gifting transactions prior to the enactment of any new legislation.

The need for planning is still important as the Federal Estate Tax Exemption remains likely to “sunset” in the year 2026, based on current law. Therefore, we will continue to move forward with our strategic planning efforts, although the timing for completion has thankfully been extended.

The Augmented Spousal Elective Share in Maryland

  1. What is the Elective Share?

The Elective Share is a statutory amount of a Decedent’s Estate that a surviving spouse is entitled to receive under Maryland law. The surviving spouse is entitled to the statutorily set amount of the Decedent’s Estate even if the Decedent’s estate planning sought to disinherit the spouse or provided a lesser benefit for the surviving spouse.

 

  1. What is the surviving spouse entitled to receive if they choose to take the Elective Share?

If the Decedent has surviving descendants, the Elective Share is 1/3 of the Estate Subject to Election. If there are no surviving descendants, the Elective Share is 1/2 of the Estate Subject to Election.

 

  1. What changes were made in the new Augmented Elective Share Statute that took effect on October 1, 2020?

The new Elective Share statute expanded the assets included in the calculation and subject to election, making it more difficult to disinherit a spouse by keeping assets outside of probate. Previously, only probate assets, those assets in the Decedent’s sole name and administered through the probate process with the Register of Wills, were subject to a surviving spouse’s election to take the Elective Share.

Under Maryland’s prior Elective Share law, a surviving spouse could be entirely disinherited by the Decedent through careful estate planning and asset re-titling. Such planning could cause a dispute that led to litigation when a disinherited surviving spouse attempted to bring non-probate assets back into the probate estate for the purposes of the Elective Share. This often led to long and expensive legal battles while the courts applied a fact specific test to determine if the non-probate assets were removed from the probate estate to undermine the Elective Share and should thus be subject to the Elective Share anyway. In the alternative, a surviving spouse who inherited a large sum of non-probate assets such as joint assets or assets with beneficiary designations, could file an election to take the Elective Share from the probate estate and unfairly reduce distributions to other beneficiaries named in the Decedent’s Last Will and Testament.

 

  1. What assets are subject to Maryland’s new Augmented Elective Share?

The new Augmented Elective Share captures all the Decedent’s assets, whether they are solely owned, jointly owned, held in trust, transferred shortly before death, or subject to a beneficiary designation. In some cases, assets that may not be owned by the Decedent, but which the Decedent holds a qualifying power of disposition over the property, such that the Decedent controls who receives the property after their death, may be included. Certain assets are specifically excluded including 529 plans, Special Needs Trusts, transfers during lifetime for fair market value, and assets that were distributed during or after life with consent of the surviving spouse. Once all assets are accounted for, the value of the Estate Subject to Election is calculated by subtracting out funeral and administrative expenses, family allowances, enforceable claims and debts, and certain trust assets. Finally, the amount distributable to the surviving spouse pursuant to their election is further reduced based on assets already passing to the surviving spouse via probate, trust, joint ownership, or beneficiary designation.

 

  1. When did the new Augmented Elective Share go into effect and to which estates does it apply?

The new Augmented Elective Share applies to all Decedents dying on or after October 1, 2020.

 

  1. When does an election to take the Augmented Elective Share have to be filed?

An election to take the Augmented Elective Share must be filed with the Register of Wills in the County in which the Decedent resided at the time of their death at the later of 9 months after date of death or 6 months after the first appointment of a Personal Representative in the Decedent’s probate estate.

 

  1. Who can file an election to take the Augmented Elective Share?

The Elective Share is specific to the surviving spouse and cannot be exercised by any other person or transferred to another person. In the event that the surviving spouse is incapacitated, an election may be filed via court order, by a court appointed guardian of the property for the surviving spouse, or by an agent appointed under the surviving spouse’s Power of Attorney. Any election must be filed during the surviving spouse’s lifetime and cannot be filed after the surviving spouse’s death by the personal representative of the surviving spouse’s estate.

 

  1. Can the Right of Election be waived?

Yes. The right of a surviving spouse to elect against an estate can be waived in a pre-nuptial or post-nuptial agreement, in a separation agreement signed in contemplation of divorce, or any other agreement signed by the surviving spouse. The language waiving the Right of Election need not be specific to the Elective Share and the right is considered waived if the surviving spouse signs a document stating that they are giving up or waiving “all rights” in their spouse’s property.

 

Bagley & Rhody, P.C. has several practice area groups for which the new Augmented Elective Share Statute has an impact: the estate planning team, estate and trust administration team, and estate and trust litigation team. Click here for a more detailed summary of matters handled by the Firm and the members of the practice area teams.

Financial Exploitation of Susceptible Adults and Older Adults (Maryland SAFE Act)

  1. What is the Maryland SAFE Act?
    The SAFE Act, which was passed unanimously by Maryland legislature in 2021, goes into effect on October 1, 2021. It authorizes the Attorney General’s Office to take certain actions, including filing suit, on behalf of susceptible adults and older adults, and creates a new civil cause of action for susceptible or older adults, or their authorized representative to recover money lost through financial exploitation in Court.

 

  1. What does SAFE stand for?
    Stop Adult Financial Exploitation

 

  1. What issue did the Act seek to address?
    Prior to this Act, Maryland primarily had only criminal penalties specifically available to redress such issues, which caused difficulty for many susceptible or older adults who were financially exploited, and their families, to seek recovery. They were reliant upon the State’s Attorneys office in their county of residence, or other avenues such as reporting matters to the local Adult Protective Services. All too often these methods resulted in no action being taken. Families were often left with nothing to do unless they sought a guardianship over the susceptible or older adult to allow the guardian to file suit. Or they waited until the death of their loved one to file suit on behalf of the Estate seeking recovery.

 

  1. Who is protected under this new law?
    The law seeks to protect older adults, defined as anyone 68 years and older, as well as “susceptible adults.” Susceptible adults are defined as anyone unable to perform without help associated with daily living due to their advanced age, a disability or disease, or even habitual drunkenness or a drug addiction. Such help include using the phone, doing laundry and dressing, shopping, getting transportation, preparing meals, managing medication, and managing finances, amongst other day-to-day tasks.

 

  1. What is “financial exploitation”?
    “Financial exploitation” is defined in law as an act taken by a person in a position of trust and confidence with the older or susceptible adult, who knowingly obtains or uses the older or susceptible adult’s assets with the intent to deprive the adult of the use or possession of those assets. Financial exploitation is further defined as the use of deception or similar tactics or obtaining a consent when the exploiter knows or should know the adult lacks capacity to consent; to deprive the older or susceptible adult of their property.

 

  1. What rights does the new law give to susceptible and older adults?
    The Act allows them or their agents/family members to contact the Attorney General’s office or bring a civil cause of action (i.e., file a lawsuit) against the exploiter seeking recovery of misappropriated assets.

 

  1. Who can bring a lawsuit under the SAFE Act?
    Of course, the susceptible or older adult themselves may bring the suit against the exploiter, but so may the victim’s attorney. In fact, a guardian, trustee or other fiduciary; a spouse, parent or descendant of the victim; an heir or beneficiary of the victim; and even the victim’s personal representative, sometimes known as an executor of the Estate, if the susceptible or older adult has passed away may also bring the suit.

 

  1. When must a lawsuit be filed?
    The statute of limitations to bring a claim under the SAFE Act is five years from the date the exploitation occurred, or the potential plaintiff discovered, or should have discovered, the facts constituting the financial exploitation. This is significantly longer than the standard three-year limitation period in Maryland.

 

  1. If a plaintiff files suit and is successful, what damages can the Court award under the SAFE Act?
    The Court can award a maximum of three times the compensatory damages, or the amount the exploiter took or deceived from the victim. Unlike the traditional civil equitable claims limited to recovering what was taken improperly, the ability to obtain more than what was taken under the Act serves as punitive damages in a tort action to discourage such bad behavior. In addition, the Court may award any number of more traditional and equitable remedies including an injunction, recission of a contract, restitution, declaratory relief, and a constructive trust, amongst others.

 

The litigation team at Bagley & Rhody, P.C. focuses their practice on contested estates and trusts related matters, including representation of matters addressed by the SAFE Act. Click here for more information to specific types of litigation matters handled by the Firm and the members of the litigation team.

Estate Planning Organizer

Please review and complete the attached Estate Planning Organizer in advance of your introductory estate planning meeting.  Family names and contact information, along with a breakdown of your assets/liabilities are most relevant for estate planning purposes.  If you maintain a listing of assets in a separate format, please feel free to forward that list as opposed to completing the asset/liability section of the form.

Estate Planning Organizer (Fillable Forms)

The Holidays And The Gift Of Family Harmony: The Importance Of Proper Estate Planning To Avoid Litigation After Your Passing

This year, when many will not be able to spend the holidays with loved ones because of COVID-19 fears or restrictions, the thoughts and memories of family gatherings at the holidays will likely bring both joy and sadness.  Not all families, however, associate the holidays with harmonious family gatherings.  In recent years, the litigators at our firm have seen an increasing amount of litigation cases resulting from poor or no estate planning.  Many times, the litigation is between siblings that have never gotten along, and once their parents pass away, they are left with no one to try and keep the peace between them.  Sometimes, however, the parents did something, or did not do something, that leads to disputes between family members at the passing of the second to die parent.

Many people forego proper estate planning because of the perceived cost of having an attorney prepare the documents, and the proliferation of online websites offering low-cost, do it yourself estate planning. Others simply don’t want to face their own mortality and engage in the process. This can, however, lead to costly litigation and unintended consequences.

Americans are fascinated with celebrities, and despite their fame and fortune, there are many examples of contested litigation after their passing. Some notable examples of these celebrity estate disputes over the years include: Casey Kasem, Anna Nicole Smith and the Estate of J. Howard Marshall II, Martin Luther King, Jr., Tom Clancy, James Brown, Tony Curtis, Jimi Hendrix, Prince, and. Kurt Cobain. More recently, disputes have arisen in the estate of the “Queen of Soul”, Aretha Franklin, whose situation provides a cautionary tale for those inclined to avoid estate planning, or to prepare documents themselves.

Everyone knows the iconic lyrics to Ms. Franklin’s song “Respect”: “What you want, baby, I got it. What you need, do you know I got it?…. I’m about to give you all of my money; and all I’m askin’ in return, honey….”  Unfortunately, the disposition of all of her money at her death is in limbo, and the Queen of Soul’s actual wishes may be known, but not followed.

On August 16, 2018, it appeared that Ms. Franklin died without a will to govern disposition of assets at her death.  Her four sons expected that her estate would be split evenly between each of them under Michigan’s laws of intestacy, which is the statutory disposition of assets when someone dies without a will.  In 2019, however, Ms. Franklin’s longtime attorneys disclosed the discovery and existence of several handwritten wills, found in one of her homes.  These documents were only signed by her, and contained notes in the margins, or delineations, and crossed out words and provisions.

This surprising turn of events shook up the administration of Ms. Franklin’s estate and pitted family against one another in court.  A Petition for Instructions on Validity and Admission of a Purported Holographic Will was filed on May 20, 2019 submitting three holographic wills to the probate court.[1]  This left it up to the probate court to decide whether these alleged handwritten wills, that contradicted each other, referred to in the legal community as “holographic wills”, are valid and control the disposition of Ms. Franklin’s estate.

In Maryland, the handwritten documents would be held invalid and Ms. Franklin’s estate would be distributed under the laws of intestacy and divided equally among her four sons.[2] This is because Maryland, unlike Michigan, only recognizes holographic wills under extremely limited circumstances, and offers none of the flexibility built into Ms. Franklins home state of Michigan. Maryland only recognizes holographic wills of a Maryland domiciled decedent the armed services and sign the holographic will outside of the U.S., D.C., or any U.S. territory.[3] Even if this limited exception is met, the holographic will is automatically voided one year after the testator is discharged from the armed forces, further limiting its control of the decedent’s estate.[4] To be valid under Maryland law a will must meet the following requirements to be valid: (1) In writing; (2) Signed by the testator, or by some other person for the testator, in the testator’s presence and by the testator’s express direction; and (3) Attested and signed by two or more credible witnesses in the presence of the testator.[5]  These statutory requirements are strictly construed.  For example, a will signed by the testator and witnessed by only one witness, even if that witness is a notary public, is invalid. The only exceptions under Maryland law are, as noted above a valid holographic will, or a will executed by the testator or testatrix in conformance of the laws of their prior place of domicile or where they were physically located when the will was signed.

Michigan, however, has a much broader definition and acceptance of holographic wills. Under Michigan law, such a document is valid “whether or not witnessed, if it is dated, and if the testator’s signature and the document’s material portions are in the testator’s handwriting.”[6] Under Michigan law, extrinsic evidence, outside the four corners of the document and parts of the document not in the testator’s handwriting, is also admissible to prove their intent. Under Maryland law, absent a latent ambiguity[7] in the document, extrinsic evidence is not admissible to prove the testator or testatrix’s intent.

Ms. Franklin, as could many others who die with no will or documents they prepared themselves, could have saved her family the time and expense of protracted probate and litigation if she had proper estate planning in place. The well-known idiom, you get what you pay for, certainly applies in this situation.  The one-size fits all product that has you input information into a computer and spits out a resulting document, may work in some instances, but the lack of personal touch, especially the ability to delve deeper into your specific family situation and needs, can result in a document that fails to address your needs. Similarly, trying to create a legal document by using a sample form you pulled up on the internet, may result in a document that is deemed invalid, or leads to more questions than answers.

The best way to try to ensure that your wishes are followed at your passing, and to try to promote family harmony, is to meet with an attorney and have proper estate planning in place.  Even if the family members don’t see eye to eye on matters, having documents in place that are clear and concise, and in accordance with Maryland law, can help mitigate potential issues and litigation.

[1] https://www.documentcloud.org/documents/6020063-TYPED-PAGES-Aretha-Franklin-Will.html.

[2] Md. Code Est. & Truss § 3-101 and 3-103.

[3] Md. Code Est. & Trusts § 4-103(a).

[4] Md. Code Est. & Trusts § 4-103(b).

[5]Md. Code Est. & Trusts § 4-102.

[6] http://www.legislature.mi.gov/(S(etgxewgcsge5jiql154uslgh))/mileg.aspx?page=getobject&objectname=mcl-700-2502.

[7] A latent ambiguity arises when the language at issue is clear on its face but upon introduction of extrinsic evidence, it reveals multiple interpretations. For example, a will that leaves assets to John Smith, could refer to multiple individuals known by the testator or testatrix, which would require introduction of extrinsic evidence to reveal this ambiguity and to help sort out their intent as to which John Smith is referred to in the document.

Estate Tax Planning in Advance of the 2020 Presidential Election

Many high net worth clients are taking advantage of the heightened Federal Estate/Gift Tax exemption through lifetime giving to their intended beneficiaries (or a trust for their benefit) prior to any planned (or unplanned) drop in the Federal Estate/Gift Tax exemption.

 Background:

  • The Tax Cuts and Jobs Act (TCJA) enacted by President Trump in 2017 increased the Federal Estate/Gift Tax exemption (“Federal Exemption”) (the amount you can pass to beneficiaries free from estate/gift tax either during lifetime or at death) to $10 million indexed for inflation (currently $11.58 million for 2020), an increase from $5 million indexed for inflation in 2017. The Maryland Estate Tax Exemption remains at $5 million per spouse. Distributions to spouses and charities are exempt from tax.
  • All assets transferred either during lifetime (or at death) in excess of the Federal Exemption are subject to a 40% Federal Estate/Gift tax plus any state level estate tax. Assets in excess of the Maryland Estate Tax Exemption will be taxed at 16%.
  • The Federal Exemption is set to “sunset” back to $5 million indexed for inflation in 2026, absent legislative action.
  • Vice President Biden, if elected, has proposed a reduction in the Federal Exemption back to $5 million prior to 2026.

Impact of a Drop in Federal Exemption? For high net worth clients with assets in excess of the current Federal Exemption, the proposed reduction, could result in an increased estate tax liability at death of $2 million per spouse (or $4 million per couple).

How are High Net Worth Clients Planning? Many clients are considering gifting to fully utilize their increased Federal Exemption before it drops in 2026 (or earlier). To gift an asset outside of your estate, you must give up control and the right to benefit from a gifted asset. The Treasury has issued regulations that any gift completed prior to the “sunset” of the Federal Exemption will not be “clawed back” into the estate.

 Opportunities for gifting include:

  • Outright to children, grandchildren or other beneficiaries – often not advised for substantial gifts due to creditor concerns and future estate tax considerations.
  • In trust for children, grandchildren or other beneficiaries – which can be helpful to control use of funds for a minor or spendthrift beneficiary. Oftentimes lifetime/dynasty trusts (as opposed to trusts that provide for a mandatory distribution of assets when a beneficiary reaches a certain age) are used to preserve creditor protection and estate tax efficiency.
  • Spousal Lifetime Access Trust (SLAT) for the benefit of your spouse for lifetime – which helps to maintain access and control over the gifted funds through a spouse. Both spouses can create and fund SLATs for the other spouse if the trusts are drafted properly to avoid the Reciprocal Trust Doctrine.
  • Grantor Retained Annuity Trusts (GRAT) – A GRAT is a trust to which the Grantor transfers property and from which the Grantor receives an annuity payment each year for a term of years. The retained annuity payment has the effect of reducing the value of any gifted asset.

Intentionally Defective Grantor Trusts (“Grantor Trusts”) – often when lifetime gifts are made in trust, they are made to Grantor Trusts. Assets gifted to a Grantor Trust are removed from the Grantor’s estate for estate tax purposes, yet still part of the Grantor’s estate for income tax purposes. All income generated by the trust will continue to be taxed back to the Grantor. The Grantor could be reimbursed from the trust for this tax liability or alternatively could pay the tax on behalf of the trust which has the effect of an indirect gift (without any additional gift tax consequence). In addition, Grantor Trusts allow a Grantor to sell an asset to the Grantor Trust without recognition of gain/loss.

How Much to Gift? – As mentioned above, to fully utilize the heightened Federal Exemption to its fullest, the entire $11.58 million exemption would need to be gifted. A gift for less than the full Federal Exemption will reduce your remaining Federal Exemption following any sunset. Therefore, if you gift $1 million before the end of 2020 and the Federal Exemption drops to $5 million in 2021, your remaining Federal Exemption at that time will be $4 million. To avoid Buyer’s Remorse, flexibility in the gifting strategy should be considered. In addition to the Federal Exemption, each spouse is currently permitted to gift $15,000 per person per year, without any reduction of the Federal Exemption.

Which Assets to Gift? – Ideally, there are three factors that make an asset a target for gifting, including (1) the ability to devalue the “fair market value” of the asset due to a low appraisal and/or valuation which incorporates discounts for lack of marketability and lack of control on a business valuation, (2) an asset that is likely to appreciate in value in the future, and (3) an asset that is cash flowing.

How to Prepare?

  • Prepare a detailed financial statement with asset information, ownership titling and estimated value to determine the need for gifting;
  • Schedule a meeting with your estate planning professional at Bagley Rhody to review your financial statement and goals for planning;
  • Formulate a gifting plan and begin drafting Irrevocable Trusts, as needed;
  • Obtain appraisals/business valuations for identified gifting targets; and
  • Finalize execution of gifting transaction and file Form 709 Gift Tax Return.

* The above is not legal advice and a personalized review is necessary to determine the exact impact of the Federal Estate/Gift Tax on your estate.

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