Now is the time for our wealthiest clients to update their estate plans.

A primary concern for all of our wealthy clients is the estate tax. Right now we have a perfect opportunity for wealth transfers for affluent and high net worth clients. Effective estate planning will use today’s low interest rates, low gift tax rates, and lowered asset valuations to reduce an estate for half the cost of just two years ago, and most likely half the cost it will be two years from now.

Our strategies include: Gifting; Advance Selling; Charitable Trusts; and Minority Discounts.


Historically IRS transfer rates have the gift tax rate lower than we’ve seen in a generation. We take advantage of this fact by using the $13,000 annual exclusion amount, creating simple and rolling Grantor Retained Annuity Trusts, selling interests in a closely held business to Grantor Trusts, and making low-interest loans to family members.

It’s important to take action on GRATs as soon as possible. The Obama administration has proposed making the minimum term of a GRAT 10 years (as opposed to 2). Since it’s vital for the grantor to outlive the Trust, this will make trusts for older prosperous individuals a far riskier proposition. Additionally, congress is considering requiring a minimum 10% valuation on transfer – meaning it will no longer be possible to “zero-out” a GRAT.

Advance Selling:

The combination of low interest rates and low valuation of assets means that we can transfer what was a $1,000,000 piece of property four years ago at its reduced value of, say, $700,000. When prices rebound over the next few years, we will have accomplished a $1,000,000 transfer for a fraction of the cost, substantially reducing the tax burden.

Let’s take advantage of the low capital gains rate – only 15% for the top tax brackets.

Charitable Trusts:

Wealthy families have always taken advantage of the tax advantage of charitable giving.  With interest rates at a low, the pendulum on charitable trusts has swung between favoring charitable lead trusts and charitable remainder trusts. Many of our current high net worth clients favor charitable remainder trusts, but both can be used effectively.

Minority Discounts:

With this technique, the value of the asset is discounted due to lack of marketability and reduced control of the asset. Sophisticated estate planners, working with top local estate CPA firms, have transferred millions of dollars without paying estate taxes, and won challenges from the IRS on those transfers.

However, it’s important to act while the rules are advantageous for wealthy clients and family limited partnerships: Congress is considering legislation (H.R. 436) to limit the use of minority interest discounts for lack of control in valuing business interests transferred between family members. Additionally, the proposed legislation would eliminate valuation discounts for certain closely-held entities to the extent of their non-business or passive assets.

Why choose the Law Office of Daniel K. Printz to do your advanced estate planning?

We have formed partnerships with top local financial planners and CPA firms, known for their expertise with reducing estate taxation through sophisticated but legal (in fact, battle-tested) techniques.

Call today for a consultation. (858)740-4370.