"Put not your trust in money, but put your money in trust."
Oliver Wendell Holmes, Sr.

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Wealth Transfer

New York Wealth Transfer Attorneys Providing Customized Estate Planning to Optimize Results in Passing More Assets Down The Generations:

People with significant wealth face potential estate tax rates in excess of 50% when attempting to pass wealth to their children and potentially 100% when passing assets grandchildren. The attorneys of Maurice Kassimir & Associates, P.C. are adept at transferring wealth with the least possible estate tax consequences.

Some of the tools Maurice Kassimir & Associates, P.C.’s lawyer use to maximize wealth transfer include grantor retained annuity trusts (GRAT’s) and intentionally defective grantor trusts (IDGT’s).

With a GRAT, an individual (the grantor) contributes property to a trust and retains an annuity for a term of years. After the retained term ends, the property in the GRAT passes to the children, free of gift and estate tax. The grantor may leverage the gift by retaining responsibility for reporting and paying income tax on any income generated by the GRAT assets.

An IDGT is an irrevocable trust usually created for the benefit of the grantor’s spouse, and/or children and grandchildren. The trust is structured so that the trust assets will not be included in the grantor’s estate. This is typically accomplished by transferring assets to the IDGT via a gift, loan or sale.

Similar to the GRAT, the IDGT is drafted so that the grantor is still treated as the owner of the trust for income tax purposes. Hence it is “defective” for income tax purposes. Because the grantor is paying the income taxes on any income generated by the trust, the trust assets can grow at an accelerated pace, leaving substantially more assets in the trust to pass on to the grantor’s heirs. The income tax paid by the grantor with other assets is not an additional gift for gift tax purposes.

A IDGT can achieve excellent wealth preservation results. Here is an example of one such Maurice Kassimir & Associates, P.C. success story:

The client owned a very successful family business in which three of his children were involved. Maurice Kassimir & Associates, P.C. arranged a recapitalization of the business so that the voting stock represented one percent of the company’s equity and the non-voting stock represented 99 percent of the equity. The 99 percent interest was then sold to an IDGT set up for the benefit of the children.

The full value of the company was $12 million, but under law the non voting stock could be valued at $8 million because of discounts for the lack of control and minority interest. Because the client received an $8 million note in exchange for the sale of the stock, the value of the business was then capped at $8 million. All income and appreciation of the business after the date of sale is not part of the parent’s estate. Only the $8 million note would potentially be included in the taxable estate. The note would be paid down from profits of the business.

Similarly, had the non-voting stock been gifted to a GRAT in which the grantor retained the right to receive an annuity of approximately $1 million per year for a ten(10) year period, all the non-voting stock would be removed from the estate at zero tax cost. The annuity would be paid from profits of the business.

Up to Date With Changes in the Laws Affecting Estate Planning. . .

Family limited partnerships (FLPs) have been useful for estate planning purposes, but are vulnerable to IRS scrutiny if not constructed for a legitimate business purpose. The attorneys at Maurice Kassimir & Associates, P.C. are always current on the latest legal developments and tax rulings affecting estate-planning devices, and can advise you to navigate through changing conditions.

The attorneys at Maurice Kassimir & Associates, P.C. are adept at figuring out creative ways within the structure of the tax laws to help preserve wealth for your family members. Contact them for sophisticated state of the art planning to preserve your wealth.

Plan Today, Save Tomorrow

If you are looking for the very best legal advice in estate and succession planning, or estate and trust administration, contact the law firm of Maurice Kassimir & Associates, P.C.

(212) 944-1377

Providing sophisticated estate planning to insure the accumulation, preservation and transfer of wealth for clients in the New York Metro area.

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