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Fiscal cliff considerations for Florida estate plans

Estate planning professionals have been urging clients for months to review their tax liabilities before Bush-era tax cuts expire at the end of the year. With the so-called "fiscal cliff" looming ever closer, West Palm Beach residents may want to take a cue from business owners and investors nationwide and act quickly to assess whether gifting before the end of the year will advance their estate planning goals.

According to trust and estate professionals, family business owners are pursuing a variety of opportunities to reduce their personal assets in anticipation of lower estate tax thresholds. Many experts recommend gifting assets before they appreciate in value and report that family business owners are taking advantage of current low market values to gift nonvoting company stock to their children.

Gifting nonvoting shares allows parents to maintain operational control of the business while reducing their taxable assets. For many business owners, similar benefits can be attained by conveying shares or ownership interests to a family limited partnership or limited liability company. For business owners or investors seeking to establish financial supports for spouses or controlled distributions to heirs and beneficiaries, an irrevocable trust may present a more versatile alternative.

While some business owners are keeping their eyes on probable estate tax hikes, others are looking to sell in anticipation of increased capital gains taxes. Many of those business owners might recognize additional benefits by factoring estate planning concerns into their plans for the disposition of sale proceeds. An experienced Florida estate planning attorney can help find effective solutions for maximizing this year's tax advantages, but the time for action continues to tick away.

Source: Crain's Detroit Business, "Edged toward action," Dustin Walsh, Dec. 2, 2012

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