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Pre-Election Planning:Wealth Transfer Now

Presented By:Jamie Kalicki & Mark Smallhouse

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Procrastinator’s Guide to Last-Minute Estate Planning

Current state of the law.

Once in a lifetime opportunity to give up to $5 million/$10 million to heirs without gift tax or generation-skipping transfer tax. Opportunity will expire 12/31/12.

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What This Means to You

Estates with assets of greater than $1 million will, after 12/31/12, be taxed at 55% (current tax rate is 35%).

Transfer now to avoid the uncertainty generated by what the future brings.

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Sounds Great – But I Do Not Want to Give up Control and Enjoyment of my Assets!

You do not have to. We can designate transfers of assets to the following structures to ensure your continued control and/or ability to access and use those assets. Family Limited Liability Companies/LLP’s A Nevada Asset Protection Trust Nevantage STING™ Trust Intentionally Defective Grantor Trusts

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Is This Really Going to Happen?

There have been previous proposals to reduce the gift/estate tax exclusion to $3.5 million; however, the extremely partisan race concerns us.

Increases in inflation scare us more.

Even more scary is the Obama Administration’s 2013 revenue proposals dealing with common estate planning strategies.

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Why Do I Need to Act Now?

Curing problems.

Valuation problems.

The moral - if you think you are going to take advantage of this opportunity, you need to start now.

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Understanding the 3.8% Medicare Surtax

The Affordable Care Act imposes a 3.8% Medicare surtax.

The 3.8% Medicare surtax is set forth new IRC §1411, which is effective for tax years after 2012.

The 3.8% surtax applies to certain passive investment income of individuals and trusts and estates based upon a mathematical formula.

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Application of Surtax to Individuals

Threshold amounts.

Joint filers - $250,000

Married taxpayers filing separately - $125,000

Individual taxpayers - $200,000

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Types of Income the Tax Applies To

Dividends

Rents

Interest

Capital Gains

Royalty

Passive Activity Income

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Types of Income Excluded from Surtax

Self-Employment Income

Active Trader Business Income

Gain on Sale of Active Interest in partnerships or S corporations

IRA or qualified plan distributions

Trusts for charities, except Charitable Lead Trusts

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Planning to Avoid or Minimize the Impact of the Tax

There are a number of planning techniques that to reduce your exposure to tax. Those include:

Reduce your overall net investment income by allocating more of your investments:o Tax-deferred annuitieso Life Insuranceo Rental Real Estateo Oil and Gas Investments

Sell appreciated assets now.

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Q&AJoin us next month on

WEDNESDAY, SEPTEMBER 26th as we discuss:

“END OF THE YEAR PLANNING”

THANK YOU!

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Nevantage.com

Jamie Kalicki & Mark Smallhouse