WHAT IS

LEGACY WEALTH
PLANNING?
A Look at Some of the Challenges of Legacy Wealth Planning in Nevada As Well As the Solutions that Can Be Implemented So You Can Have a Sound Financial Framework

What Is Legacy Wealth Planning? www.wealth-counselors.com NEVADA ESTATE PLANNING ATTORNEY

BRADLEY B ANDERSON

1

Wealthy people are in a position to leave behind powerful legacies. However, this opportunity can be lost if the correct steps have not been taken in advance. Indeed, we have all heard stories about lost fortunes. Legacy wealth planning is the key to wealth preservation. If you work with a licensed wealth counselor to implement a sound financial framework, you can pave the way for succeeding generations of your family. Let's look at some of the challenges that exist and touch upon the solutions that can be implemented.

FEDERAL TRANSFER TAXES
The impact of the federal estate tax is perhaps the most important consideration when you are engaged in the process of legacy wealth planning. At the current time, the maximum rate of the federal estate tax is 40 percent. The credit or exclusion is $5.25 million, scheduled to increase to $5.34 million in 2014. This is the amount that you can pass to your heirs tax-free before the death levy. It should be noted that this exclusion applies to asset transfers to people other than your spouse. There is an unlimited marital deduction. If you are married to an American citizen, you can transfer any amount of money to your spouse free of the estate tax at your death. The estate tax exclusion is portable. If you predecease your spouse, he or she

What Is Legacy Wealth Planning?

www.wealth-counselors.com

2

could use your exclusion as well as his or her own. In addition to the estate tax, there is also a gift tax in the United States. You can't just give away assets while you are living in an effort to avoid the federal estate tax. The estate tax and the gift tax are unified. The $5.25 million exclusion extends to taxable gifts, or gifts that exceed the annual exclusion amount. As a result, if you give away $5.25 million while you are living using this exclusion, the remainder of your estate would be subject to federal estate tax. In addition to the unified gift/estate tax exclusion there is an annual per person gift tax exclusion. Under the tax code, you may give gifts totaling as much as $14,000 to any number of individuals in a given year free of the gift tax. To be clear, when you give gifts using this exclusion, they do not reduce the amount of your available unified exclusion.

TAX EFFICIENCY STRATEGIES
There are a numberof strategies you can use to mitigate your estate tax exposure. One possible solution would be the creation of a generation-skipping trust. A single imposition of the federal estate tax can have an enormous impact on your financial legacy. However, the estate tax can be imposed over multiple generations, and the same resources could be taxed multiple times. With a generation-skipping trust you name your children as the beneficiaries and trustees for their lives. Your children can receive monetary distributions

What Is Legacy Wealth Planning?

www.wealth-counselors.com

3

from the trust. They can also utilize property that has been conveyed into the trust. At the death of your child, his or her share can pass to the grandchildren, estate tax free! Through a special power of appointment, the children may actually be able to direct some of the trust's actions. The children can benefit from the assets that have been conveyed into the trust. However, no estate taxes will be levied because the children technically never directly own the assets. Though there may be a tax on the parent’s estate, two or more generations benefited, but there was only one round of taxation. This is one of numerous different things that you can do to arrange for asset transfers in a tax efficient manner.

FAMILY HEIRLOOMS AND PERSONAL MEMOIRS
When you are crafting your legacy you may want to consider the value of family heirlooms. These objects have monetary value, but that may not be the most important point.

Legacy wealth planning is the key to wealth preservation. If you work with a licensed wealth counselor to implement a sound financial framework, you can in fact pave the way for succeeding generations of your family.

Your legacy can involve educating younger family members about the past. There are stories behind these heirlooms, and you can make sure that they live on by sharing them when you are planning your estate. Oral storytelling can be part of the plan. In addition, you may want to take the time to record your personal memoirs. People are often very interested in their ancestry, and your link in the chain can be fully understood if you take the time to share your experiences in writing.

What Is Legacy Wealth Planning?

www.wealth-counselors.com

4

PHILANTHROPY
Setting aside resources for the benefit of charitable causes can also be part of a legacy wealth plan. There are personal rewards on an emotional level, and there can also be tax benefits realized through acts of charitable giving.

CONCLUSION
Legacy wealth planning is a must for high net worth individuals. If you work with a licensed attorney who focuses on wealth preservation, you can take all the right steps and avoid the pitfalls that have decimated many fortunes.

REFERENCES
Forbes http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-toestate-planning/ American Bar Association http://www.americanbar.org/groups/real_property_trust_estate/resources/estat e_planning.html

What Is Legacy Wealth Planning?

www.wealth-counselors.com

5

About the Author
BradleyB Anderson
Prior to founding his own firm in 1995, Mr. Anderson served as a senior counsel for two major financial institutions and witnessed the often devastating effects of ineffective estate planning with many customers of those institutions. When he eventually decided to venture out on his own, this experience led him to focus exclusively on estate planning, providing his clients with a full range of basic and advanced planning options. Mr. Anderson began his professional life as a teacher of mentally-challenged, visually impaired students. After four years as a special education teacher, Mr. Anderson returned to school to obtain his law degree and begin a second career. Upon finishing law school, he went to work for a civil litigation firm, spending five years handling litigation, probate and wills work. He then moved on to Wells Fargo Credit Corporation where he served as senior counsel. In 1990 he accepted a position with the First Interstate Bank Legal Division, where he had responsibility for several divisions, including the Trust Department. In 1995, he began his own practice as Bradley B Anderson, Attorney at Law. The firm has continued to grow into the premier estate planning law firm we see today. Anderson, Dorn, & Rader, Ltd. Legacy and Wealth Planning Attorneys 500 Damonte Ranch Parkway Suite 860 Reno, NV 89521 Phone: (775) 823-9455 Fax: (775) 823-9456

What Is Legacy Wealth Planning?

www.wealth-counselors.com

6

Sign up to vote on this title
UsefulNot useful