A few weeks ago I heard estate planning attorney Dave Holaday speak on the topic of “Zero Tax Planning” at the National Network of Estate Planning Attorneys collegium in Orlando, Florida. It sounded to me like a concept that would be very interesting to clients.
In contrast to the conventional approach (keep assets until death, leave to the family, and pay as little tax as possible), zero tax planning eliminates any estate tax through the use lifetime gifting to family members, gifting at death to charity, and the full use of estate tax exemptions.
It begins with the concept that paying estate tax is 100% voluntary. The approach includes these factors:
- Make sure you have what you need during life
- Decide what you want the kids to have rather than simply leaving them what is left
- Implement one or more strategies during life to achieve family wealth transfer goals
- Make lifetime and/or testamentary charitable gifts to reduce estate tax to zero
The process begins with the client answering four questions:
- How much estate tax would you like to pay?
- How much would you like your children and grandchildren to inherit?
- Your estate will ultimately go to three places; tax, heirs and charity. Ideally, how would you like it to be divided?
- Under your current plan, how do you think it will be divided? How do you feel about that?
Once the client’s goals are understood, the attorney and client together develop a plan to reach the client’s goals.
If you’d like to discuss these concepts in person and develop your own family plan, contact Jim Eagar at Legacy Estate Planning, LLC at (541) 324-1800. Offices in Grants Pass and Medford, Oregon.
