Author Topic: Wealthy Clintons Use Trusts to Limit Estate Tax They Back  (Read 153 times)

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http://www.bloomberg.com/news/2014-06-17/wealthy-clintons-use-trusts-to-limit-estate-tax-they-back.html

 Wealthy Clintons Use Trusts to Limit Estate Tax They Back
By Richard Rubin Jun 16, 2014 11:00 PM CT

Bill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”

continued...

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Offline rangerrebew

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Re: Wealthy Clintons Use Trusts to Limit Estate Tax They Back
« Reply #1 on: June 17, 2014, 12:42:50 PM »
Wealthy Clintons, hell.  Its more like wealthy politicians generally.
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Offline GourmetDan

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Re: Wealthy Clintons Use Trusts to Limit Estate Tax They Back
« Reply #2 on: June 17, 2014, 01:43:34 PM »

“You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”


I guess we can hope that they get the chance to take advantage of their planning sooner rather than later...

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Re: Wealthy Clintons Use Trusts to Limit Estate Tax They Back
« Reply #3 on: June 17, 2014, 01:54:55 PM »
http://www.bloomberg.com/news/2014-06-17/wealthy-clintons-use-trusts-to-limit-estate-tax-they-back.html

 Wealthy Clintons Use Trusts to Limit Estate Tax They Back
By Richard Rubin Jun 16, 2014 11:00 PM CT

Bill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”

continued...


The only potential downside to putting appreciating assets like a house into a trust for estate tax purposes is that you no longer get the date-of-death basis step-up for assets that have been taken out of the taxable estate.  Of course, since the estate tax rate is about 50% or thereabouts, and on the entire value of the assets in the estate, paying capital gains tax (20%) on only that part that represents appreciation in the house is usually a more palatable alternative - at least, that is, for people whose estates will be significantly greater than $1 million.


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