What would you suggest are the most effective tax strategies available and why? I have heard of many different ways to approach taxation and realize that trust are one avenue a person((s) can take? But without proper advice, this can prove to be difficult at times. I also know that there are different types of trust available regarding this issue, but I am not sure that I understand the differences that well.
What exactly are the major tax minimization strategies? My parents utilized trusts, but unfortunately they weren't given the best advice and my brother and I had a bit of a mess to deal with, and some things like dispersement that were "set in stone" and we could do nothing about.
In an effort to not make the same "mistakes" for my kids, I'm wondering if what the other alternatives might be. I'm sure there are other alternatives, but I am not sure which ones are considered to be the best. Can you help me understand these tax strategies better please? Which ones are considered to be the most effective and why? What changes have been made to help even more?© BrainMass Inc. brainmass.com March 4, 2021, 7:52 pm ad1c9bdddf
Your situation poses interesting questions that are not easily answered, as you know. My plan is to point you in a direction that will allow you can gather enough information to make informed decisions about your wealth planning.
You recognize that there are two basic strategies you are considering:
1. Wealth transfer planning
2. Tax planning
Although both address the concept of maximizing wealth, the two tax issues are quite different. The so called ?transfer tax?, or estate tax is one based on total value of assets transferred as of the date of death. The second tax is income tax assessed against earnings of the wealth on an annual basis before death. Neither are simple issues to tackle, and even though you stated your parents ?left a bit of a mess?, I suspect it could have been much worse.
The types of trusts are incredibly complicated as they are unique. Every family has a different idea about how to live with wealth and how to ...
The solution contains an overview of some of the complexities involved for both wealth transfer planning and tax planning. The solution points the reader to an estate attorney, but includes a list of 19 ideas which an individual should consider before talking with an attorney. This list is designed to provide a self-examination of parameters and goals the wealthy individual might want to consider before consulting an attorney.