Kentucky Estates: articles about tax planning for private clients, estates, trusts, and family businesses
The expense of college for children and grandchildren is a troubling issue for almost all of my clients. I think this is because at an instinctual level, long before crunching any numbers, clients know what the charts below show: college costs have gone truly exponential in the last one and a half generations, far outstripping increases […]
In the late 60s and early 70s at Bing Nursery School on Stanford’s campus, Walter Mischel conducted the famous “Marshmallow Experiment” on delayed gratification. Preschoolers were offered a choice between one marshmallow or cookie right away, or two if they waited about 15 minutes. When researchers tracked down study participants as adults, they found that the […]
If you have been working since the late ‘90s, you have probably collected some great stories about exercising stock options and other equity-based compensation. Some are unqualified success stories, like the time my college roommate’s father pulled up outside the college dorm in a brand-new zippy BMW convertible (top down, naturally), and told us to […]
In my practice, I have found that a majority of my clients who create significant wealth do so through ownership of a private business or a concentrated stock position in a publicly traded company. What that means for you is that if you haven’t yet started a business or taken an ownership position in one, […]
People often decide between renting or buying a place to live based on preferences and instinct: What do you want to do? If they are incrementally more analytical, they may explore “how much house” they can “afford”. This approach is grounded in capabilities. What can you do? I think the most useful approach to important financial […]
It’s wintertime, when one can’t help but think about Florida’s many advantages as a retirement haven compared to northern states. In addition to no state income taxes and better weather, a lesser-known but important Florida feature is its homestead laws. “Homestead” presents deceptively complex issues in snowbirds’ estate and tax planning when they finally become […]
If you are a KYEstates reader in a state where it’s cold in the winter, you have probably seen them: people who seem to live in your own neighborhood and golf at your club, but have a car with a Florida license plate. Who are those people? They’re the lucky ones: the Snowbirds who get a […]
This series on how grantor retained annuity trusts can be applied in situations with upside business potential presented an overview of how GRATs work in Part 1. Part 2 presented a case study of how an “Entrepreneurial GRAT” could be used to substantially improve the net-of-tax risk-adjusted return for a risky venture with a new […]
As we saw in Part 1 of this series, a grantor retained annuity trust (or “GRAT”) can be a very effective way to remove the government as a 40% silent partner in the potential upside of a business venture in several types of circumstances. In the pre-2010 regime of low estate tax exemptions, two common […]
The pursuit of wealth has long been part of the American Dream, and a positive feature of the current $5.34 million estate tax exemption (high by historic standards) is that entrepreneurs have more “run room” before the Federal government becomes a 40% silent partner in the upside of all the work, creativity, striving, and risk […]
A decade ago, when the estate tax exemption was much lower, the irrevocable life insurance trust (or “ILIT”) was a component of many (or even most) tax-aware estate plans. It was common for physicians, attorneys, architects, engineers, and corporate executives to have insurance trusts, without necessarily knowing why that was so. Reassured by their attorneys […]
Families at all levels of wealth commonly include charitable giving as a part of their estate plans. This is gratifying for the families, and absolutely essential to maintaining and building excellence in so many civic areas, including hospitals, social services, conservation, the arts, and education. It’s also true, however, that the business cultures of the […]