Gift and Estate Planning for High Net Worth Individuals
Cendrowski Corporate Advisors assists high net worth individuals in maximizing the value of gift and estate planning for tax efficiency while minimizing risk. We cover the formation of trusts, valuation of the estate, and how to structure and manage the estate properly.
Managing Gift and Estate Planning with Proven Expertise
We know managing an estate is no small task. At Cendrowski Corporate Advisors, we use our decades of experience monitoring and advising on gift and estate planning to ensure that our clients’ interests are foremost and their information remains confidential.
Every U.S. taxpayer has a lifetime gift tax exemption, currently set at $11.7 million. High net worth individuals can gift their children up to the annual limit of $15,000 each year without incurring any tax impact. Our country’s tax system allows dividing income among family members to reduce the overall tax burden, saving several thousands of dollars every year.
Cendrowski Corporate Advisors consultants can assist in developing estate planning strategies like:
- Charitable giving plans through a charitable lead trust (CLT) or charitable remainder trust (CRT)
- Recommendations on life insurance protection to cover estate taxes, protecting assets
- Creating a family limited partnership
- Business succession planning
- Asset consolidation
- Medical and incapacitation planning
- Passing ownership of family vacation properties
We interact personally with every client and share our unique perspectives on gift and estate planning for their benefit. You can trust that the Cendrowski Corporate Advisors team brings deep professional expertise and the utmost confidentiality to every estate planning endeavor.
Client Success: Family Loans and Gift Tax Planning
Cendrowski Corporate Advisors engaged with a family to assist on an individual tax return. After an initial analysis, our client indicated concern with interest-free loans of money to family members. We researched family-imputed interest loans, since types of loans can constitute a gift for federal gift tax purposes. We informed our client of the specific circumstances under which such gift treatment might occur, including, but not limited to:
- When a person makes an interest-free term loan to a family member, the foregone interest is treated as a gift. The value of that gift is the difference between the amount loaned and the market value of the interest for the loan using the applicable current interest rate.
- For instance, an interest-free loan of $100,000 for three years may be treated as the equivalent of a $90,000 loan at the appropriate interest rate. The $10,000 difference would be considered a taxable gift, calculated based on the market interest rates at the time of the loan.
- The $10,000 amount is then treated as transferred by the borrower to the lender as interest paid over the loan period. This second segment of the deemed transaction will produce interest income to the lender. It may produce an interest expense deduction to the borrower, but the deductibility depends on the borrower's use of the borrowed funds. For example, if the borrower uses the funds to start a business, the interest may be deducted as a business expense.
- Imputed interest may be offset on your gift tax return by the annual gift tax exclusion ($15,000 in 2019). If you and your spouse are willing to split gifts, or if the loan was made from joint or community property funds, that exclusion amount doubles.
Many other terms and conditions may apply to a unique situation, so consulting a Cendrowski Corporate Advisors tax professional is advised if you’d like to review tax implications for a 0% interest family loan.