Estate/Trust Tax Strategies

Estate/Trust Tax Strategies

• Gift Stock to Individuals in a Lower Tax Bracket. Recipients of gifted stock receive the giver's holding period and cost basis. If the recipient's long-term-capital-gains tax bracket is lower, it will yield tax savings.

• Hold Stock Until Death (Step-up in Basis). Holding highly appreciated assets, like stock, until death allows your heirs to inherit the assets with a stepped-up cost basis equal to the fair market value (eliminating capital gains tax).

• Utilization of a Charitable Trust (CRUT/CRAT). Charitable trusts may allow individuals to sell appreciated assets tax-deferred (to diversify), receive funds over time, and/or take a large up-front deduction

• Utilization of a Grantor Trust (GRAT). Grantor retained annuity trusts (GRATs) are estate planning tools that can shift the appreciation (post-gift) of assets to beneficiaries tax-free

• Transfer Assets to Spouse When Death Is Anticipated. Depending on your state and circumstances, transferring appreciated assets to a spouse expected to pass away may enable a full step-up in basis (upon death), eliminating capital gains tax.

Cross-Listed Tax Strategies

In addition to the above estate tax strategies, a number of other tax strategies may also apply in certain situations. We encourage you to review all of the strategies detailed on the 50+ Tax Strategies page to ensure you have the proverbial "full menu" of tax planning strategies to consider for your situation.