Writing Your Tulsa Estate Planning Blog

You do not have much reason to fear the federal estate tax, because few estates end up paying it. Even if your estate could be affected by it, there are ways to minimize the tax and possibly to avoid it completely.

The estate tax is one of those things that gets a lot more attention than it probably should. The political parties are willing to go to war over any potential changes to the federal estate tax and there is a lot written about it when they do.

However, the American public in general does not need to worry about it too much.

The estate tax only realistically affects about 1% of American families.
The overwhelming majority of estates do not have enough assets to even begin to worry about having to pay it.

Even for those who have enough assets, there are things you can do to avoid paying any estate tax as the Marco Eagle discusses in “Tax Secrets: Slay the estate tax monster.”

If you go to an experienced estate planning attorney, you will most likely be presented with several different options to minimize any estate tax burden on your estate.

The estate tax can often be avoided completely.

It is all a matter of how you structure your estate plan and what other things you want to accomplish with your plans.

Some states also have estate taxes, so merely avoiding the federal estate tax will not necessarily help you avoid all estate taxes.

Nevertheless, estate planning attorneys can also help you with states’ taxes, should that be necessary.

Reference: Marco News (August 20, 2017) “Tax Secrets: Slay the estate tax monster.”

A new study in the United Kingdom provides an ominous warning about the wealth prospects of younger people.

It seems we’ve been hearing the terms “income inequality” or “wealth inequality” frequently used in recent years to describe a growing economic trend of wealth concentration among a shrinking segment of the population.

These terms are now commonly used: from the work of economist Thomas Pikkety, to the Occupy Wall Street Movement, to every speech given by Senator Bernie Sanders, and even to the pages of The Economist. While we like to believe that everyone has a fair shot and that hard work is rewarded, a new study out of the United Kingdom raises some doubts.

Recently reported in The Independent article titled “Inherited wealth will decide how rich young people will become, a study warns,” the study suggests that due to rising home prices, stagnant wages and diminishing pensions, the wealth of young people will not come from their own hard work. Instead, it will be primarily determined by the inheritances they receive from their parents.

Although this study was conducted in the United Kingdom, many of the same sentiments and perceptions also exist in the U.S.. In the U.K., this is prompting many young people to oppose estate tax cuts or repeal. As one liberal Democrat was quoted as saying, “It cannot be right that the wealthiest families amass vast fortunes, while millions of young people see their incomes fall and home ownership slip out of reach.”

As the new Congress and President Trump undertake discussions about the future of the estate tax here in the U.S., the debate may turn at some point to discussions of income inequality, wealth concentration and the potential social role of estate taxation.

Reference: The Independent (January 5, 2017) “Inherited wealth will decide how rich young people will become, a study warns.”

One of the biggest questions concerning estate planning right now, is whether Donald Trump will carry out his campaign promise to eliminate the estate tax and whether or not he should.

The estate tax is a one of those hot button issues over which political parties are sharply divided. While campaigning for the presidency, Donald Trump repeatedly said he would eliminate the tax. His is a position that most Republicans in Congress share. Now that Donald Trump and congressional Republicans have the power to do away with the estate tax, the question becomes whether they will actually do so.

Financial Advisor addressed that question in “Death to the Death Tax?”

“I think there’s a chance he [Trump] will repeal the whole thing,” said tax attorney Martin Shenkman, whose namesake firm in Jersey City, N.J., and New York City focuses on estate and tax planning for high-net-worth individuals, closely held businesses and real estate professionals.

Shenkman also said there’s speculation about abolishing the gift and generation-skipping taxes. He pointed out that, while these taxes do not raise a lot of revenue, they were at one time intended to minimize the wealth-concentration in our country. Whether or not they still serve this social purpose, or should, is up for debate.

With all of this uncertainty, no one can predict the final outcome, but, as Shenkman said, “There’s no reason to stop planning because of this uncertainty, if the end result of the planning is to get assets in a better place than they are now regardless of the tax.”

Reference: Financial Advisor (January 3, 2017) “Death to the Death Tax?”