Applying the Right Strategy. Achieving the Desired Results.
C. William Tanzi has successfully represented many affluent private clients and their families in implementing proven wealth preservation strategies and cutting-edge tax planning techniques -- finding ways to ensure the protection of assets during the client's lifetime and maximizing the estate's value passing to heirs.
Wealth Preservation for High Net Worth Individuals: Estate and Gift Tax Planning
Contemporary approaches to wealth preservation for affluent individuals typically extend beyond the basic testamentary documents -- wills and revocable lifetime trusts. Lifetime asset transfer techniques are frequently integrated into an individual's estate plan in order to make value-efficient use of the available estate and gift tax exemptions, a concept known as "leveraging".
Many of these techniques involve the creation and funding of specialized structures for the purpose of capturing tax savings opportunities that might otherwise be lost: grantor retained annuity trusts ("GRATs"), qualified personal residence trusts ("QPRTs"), installment sales to irrevocable trusts, family limited partnerships and LLC's and other estate "freezing" strategies.
Unique estate reduction opportunities are presented through the end of 2012 in view of the possible expiration of the expanded Federal gift tax exemption (currently sheltering up to $5,120,000 in asset value). Without appropriate action by Congress before year-end, the exemption could drop to pre-2001 levels that would shelter only $1,000,000 in asset value. The time remaining to take advantage of these historically high exemption levels by permanently sheltering estate assets from tax could well be vanishing quickly.
Other lifetime techniques that utilize irrevocable trusts and other entities can achieve gift tax "excludable" transfers of asset value, such as irrevocable "Crummey" trusts and "intentionally defective" grantor trusts. Still other funded entity arrangements can provide tax-efficient sources of liquidity which can be drawn upon to defray any eventual estate tax exposure.
Learn more about how these concepts may apply in particular situations:
Frozen T-CLAT Strategy for Family Business Interests
Leveraging $5 Million Estate and GST Tax Exemptions under Testamentary Plans
Asset Protection Strategies
For individuals with identifiable wealth, becoming the target of a lawsuit can be, at best, an unpleasant experience. At worst, the legal fees and costs associated with defending third-party claims, even frivolous ones, to say nothing of the prospect of agreeing to large settlements so to avoid potentially even larger judgments, can inflict real economic devastation.
Businesses and professions are often ruined in the process, and personal assets that are unprotected possibly could be reached to satisfy a successful claim. Persons who conduct business activities in the United States or have connections with U.S. businesses possess no natural immunity to the epidemic of outsized creditor's claims that today threaten to overwhelm the American court system.
Although fewer than 5% of the people in the world reside in the United States, more than 90% of all lawsuits seeking monetary damages are filed in the U.S. -- a depressingly telling statistic. What's more, there is a growing tendency for juries to award judgments to claimants which far outstrip the coverage limits of many defendants' professional indemnity and "umbrella" liability policies.
Fortunately, many private clients can avail themselves of asset protection strategies to safeguard their hard-earned wealth from potential third-party claimants. Establishing and funding irrevocable trusts in favorable asset protection jurisdictions frequently serves to eliminate exposure of trust assets to potential creditors' claims.
Limited liability entities (limited partnerships and LLC's) often can be used in combination with trusts to make the best use of restrictive "charging order" protections allowed to creditors under applicable state law. In addition, we can advise clients on how to maximize the use of "exempt" assets and to reduce their identifiable wealth through well-timed asset transfers that can discourage would-be claimants, but nevertheless provide needed cash flow and future estate planning opportunities.
In certain cases, personalized asset protection techniques can be successfully applied in the context of pre-marital or pre-divorce planning in order to enhance an affluent client's negotiating leverage in prenuptial agreements and marital property settlements.
Learn more about how these concepts may apply in particular situations:
Foreign Situs Asset Protection/Estate Planning Structure (Basic Elements)
Charitable Dispositions, Charitable Trusts & Private Foundations
The philanthropic goals of high net worth individuals can be quite varied. Beyond the purely charitable motivations to make contributions to worthy causes and to "give back" to society, affluent persons may also seek to retain control over the investment of the contributed assets, and even a portion of the future income derived from those assets.
These seemingly conflicting objectives often can be balanced by making strategically planned charitable dispositions -- through the use of charitable lead trusts, charitable remainder trusts and pooled income funds -- which combine an individual's charitable goals with meaningful opportunities for tax savings and retained cash flow.
Similarly, bargain sales and conservation easements represent tax-favored ways to unlock the value of real estate holdings for the benefit of the clients' families and their communities in tandem.
Private foundations and other not-for-profit entities provide paths for future generations to actively participate in the management and disposition of the contributed assets, thus perpetuating the founding member's philanthropic legacy as part of a long-term family wealth plan.
Learn more about how these concepts may apply in particular situations:
Frozen T-CLAT Strategy for Family Business Interests
International Estate and Gift Tax Planning
We provide in-depth analysis and guidance on U.S. income and wealth transfer taxes affecting cross-border planning, foreign death taxes, and planning techniques for the U.S. estate, gift and generation-skipping transfer taxes.
Multi-Generational Wealth Transfer Planning
Your wish may be to leave a legacy to heirs or a favored organization — we help you develop a transfer strategy that ensures your wishes are met while minimizing potential hazards surrounding your transfer such as excessive taxes, family issues, and other critical challenges.
Family Business Succession Planning
As a business owner, timing is critical when you have to decide the right time to step out of your family business. And more important — how you will do it.
The information appearing on this website and its associated writings is for informational and educational purposes only, and does not constitute legal advice or opinion. Such advice or opinion is provided by the firm only upon engagement with respect to specific factual situations.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any discussions of U.S. federal tax issues contained in this website (including any attachments) are not intended or written to be used, and may not in fact be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction, matter or subject addressed therein.