This workshop was presented at the 2007 N.G.A. Convention in Las Vegas, Nevada.
This seminar addressed the impact of estate taxes and how to keep or transfer a family business. Topics covered 10 common mistakes in estate and business succession planning, the use of various strategies such as valuation, gifting, family partnerships, trusts, asset transfers, asset protection, charitable planning, tax minimization/reduction and many other wealth preservation strategies. The purpose was to educate and motivate the business owner to take action on their business succession and estate plan. They learned about the common mistakes and how to avoid them through state of the art planning. This session used real case studies and stories and presented various tools and techniques that have been effective in enabling owners of a business to control the transfer of their wealth, minimize or eliminate tax and preserve what has taken them a lifetime to build. The focus was on helping those who are concerned with the impact of death taxes, keeping a closely held business, and on meeting charitable goals.
To view the handouts for this workshop, click here. (.pdf 587 kb)
To preview CD, click here.
To purchase the CD/MP3 click here. (.pdf 94 kb) Order # 07NGA-38
Calculating Estate Tax Liability: 2001 to 2011 and Beyond(.pdf 104 kb) The CRS Report (PDF) provides a basic explanation of how to calculate the federal estate tax liability for a taxable estate by using the schedule of marginal tax rates and the applicable exclusion amount, or the applicable credit amount, for the year of death. The applicable exclusion amount is the amount of any decedent's taxable estate that is free from tax, known informally as the estate tax exemption. The applicable credit amount is the corresponding tax credit equal to the tax that would be due on a taxable estate the size of the applicable exclusion amount.
The CRS report also provides a shortcut to calculate the tax on the estates of descendents dying in 2006 through 2009. The estate tax liability can be calculated simply by multiplying the amount of the taxable estate in excess of the applicable exclusion amount for the year of death times the maximum estate tax rate for the year. The applicable exclusion amount is $2 million for 2006 to 2008 and $3.5 million for 2009. The maximum tax rate is 46 percent for 2006 and 45 percent for 2007 to 2009.
The Congressional Research Service is the non-partisan public policy research arm of the United States Congress that provides congressional members and committees with in-depth, non-partisan analysis of legislative issues
A study, conducted by the Center on Philanthropy at Indiana University, focuses on charitable donations and high net-worth households. The study found that these households' charitable giving would mostly stay the same if the estate tax were repealed and would stay the same or somewhat decrease if they received zero income tax deductions for their charitable contributions.
This study also asked several questions regarding the charitable practices of the 3.1 percent of the population with incomes greater than $200,000 or assets in excess of $1,000,000. Among the most interesting results are the effects of possible tax law changes and their impact on charitable giving. If the estate tax were repealed, for example, results show:
Some 56.1 percent of donors' contributions would stay the same;
Another 15.8 percent said their donations to charity would somewhat increase, and 13.7 percent indicated that their giving would dramatically increase; and
Only 3.9 percent said their donations would decrease somewhat, and 1.6 percent would dramatically decrease their contributions.
However, while many reported that receiving zero income tax deductions would not affect their giving, the overall change is significantly greater than an estate tax repeal:
Some 51.7 percent said their giving would stay the same;
Another 38.1 percent indicated that their contributions would somewhat decrease, and 7 percent said it would dramatically decrease; and
Only 0.9 and 0.2 percent said their giving would somewhat increase and dramatically increase, respectively.
