Summer has come to a close and Congress has yet to make a decision on the upcoming “fiscal cliff” which could have a dramatic impact on the estate tax landscape for high — but not “ultra high” — net worth families. With that cliff approaching, what should these moderately high net worth families do to protect against potentially significant estate taxes while still keeping things simple?
For married couples with total assets (including insurance benefits) totaling $2-$5 million, a disclaimer trust (otherwise known as a “wait and see” trust) may prove to be the simplest way for you to retain control over your assets and limit paperwork and tax filings while still preserving your valuable estate tax exemption in the event that we hurtle over the fiscal cliff.
The disclaimer trust is not generally appropriate for blended families with children from previous relationships. Additionally, for higher net worth families with assets over $5 million, advanced strategies are appropriate and should be discussed with your financial advisor, CPA or estate planning attorney.
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