Explaining Income Trust Strategies
By Robert L. Moshman
It is the time of year when professionals and their clients maximize stress for each other and then arrive in the New
Year with a hangover.
Professionals — bombarded by the annual pageant of year-end planning strategies in professional literature and lectures, and pressured by the hard deadline of December 31that terminates most effective tax moves for the year — feel obligated to inform their clients of the potential tax-saving moves that can be made.
For their part, some clients become aware of the savvy tax-saving maneuvers of others and clearly want in on that action — being decisive, avoiding taxes, outsmarting the IRS, and being able to able to brag about it to in-laws, golf buddies, colleagues, and the collective universe of people who will be irritated and jealous of the cool, smart moves that they missed out on.
Other clients who haven’t had a concern about their estate plan for years can encounter one piece of information and contact their financial advisor about it with three weeks left in the year. “Do I need a trust?” “Should I make a gift?” “Should I revise my entire estate plan before the end of the year?”
Last year’s exercise (the end of 2012), with the potential expiration of the $5.12-million gift tax exemption, prompted great concern at the end of the year. Transfers of a number of rushed gifts were subsequently regretted (which in turn led to a pronounced interest in the topic of decanting trust funds during the past year)...