High net-worth families for whom privacy is a paramount consideration may be concerned that the Corporate Transparency Act, which became law on January 1, 2021, creates a risk of sensitive ownership information being exposed to the wrong persons. This may concern family offices; however, regulated private trust companies and trusts may be exempt.
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Throughout history, gold and silver have had many important uses, including as a hedge against inflation, deflation, and economic uncertainty. For the gold investors, they have managed to preserve their wealth during some tumultuous times, including the financial crisis of 2008 and the pandemic-induced economic crisis of 2020. When it comes to investing in gold and silver, it’s essential to know the six keys to successful gold and silver ownership—the who, what, when, where, why, and how of precious metals investing.
Given the rhetoric and possible need for additional tax revenue in the U.S., families of wealth and their advisors should be aware of the future possibility of the wealth tax particularly when doing their estate planning. They should also consider how trusts might be affected by a wealth tax, including the use of a discretionary trust that can be grandfathered to avoid the wealth tax if established prior to its enactment.
The Millennials are projected to number 73 million, overtaking Baby Boomers as the largest adult segment of the U.S. population. They have different concerns and opinions than their parents, and many existing trusts may not be drafted to best accommodate Millennial beneficiaries and their desires. In most instances, traditional trust structures may not be sufficient. Generally, modern directed trusts are best suited for all generations, and it allows a Millennial beneficiary to play a key role regarding both trust distributions and investments.
The big question in the estate planning world today is whether, when, and to what extent the U.S. Congress will enact changes to gift, estate, and income tax laws. With many challenges facing the new Biden Administration, and the narrowly Democratic Senate, major tax legislation may not even be considered in 2021. Nevertheless, the tax proposals endorsed by the Biden Administration provide clear signals for actions clients should consider this year.
When guiding how your organization drives value through tax efficiencies and financial reporting, don't be surprised if the C-suite is looking for tax leaders to be technology experts. The key is to be proactive in discussions with business leadership.
Needing to meet the challenges of tax compliance for investment partnerships, chief financial officers are demanding more timely tax and financial reporting, along with the need to report and respond to investors with speed and accuracy. Partnership tax technology allows funds to meet those demands, especially in the case of private equity and hedge funds. The automation of tax compliance using a technology platform will offer advantages such as providing transparency for investors, simplifying complex allocations, and allowing a deep enough simplification to fund entity tiering.
Even when there is a financial gift to sufficiently endow an art collection today, there is no certainty that the endowment will be able to fund the charity indefinitely into the future. When there is no charity willing to preserve the collection, the artist or collector should consider using a private foundation. Especially now as the future of museums is moving away from the brick-and-mortar and toward a virtual institution.
The economy is still aimlessly lurching from the impacts of the COVID-19 pandemic, and those fits may spill over into tax-filing season. It’s likely that a disproportionate number of filers will have some income and capital gains they weren’t expecting as the result of mutual fund distributions last year. Through an effective tax-managed investment strategy, even a tumultuous year like 2020 can produce benefits. If the investor structures realized losses to manage tax burden, even a difficult year can help you meet your investment goals.
The possibility of dramatic tax changes on lifetime gifts and after an individual’s death has increased with introduction of the For the 99.5 Percent Act and the Sensible Taxation and Equity Promotion Act in the U.S. While it remains early in the legislative process, the chances of significant changes are growing and the window for action is closing. For those individuals and families of wealth who said they would deal with these issues “later,” the time is now to do proactive tax and estate planning.