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Recent Posts
Important IRS Update: Significant Interest Penalty Increase for Tax Underpayments

The Internal Revenue Service (IRS) has recently announced a critical change that could significantly impact taxpayers who underpay their taxes. This update is particularly relevant as we approach the next tax filing season. Previously, the IRS charged a 3% interest penalty on estimated tax underpayments. However, this rate has now been increased to a substantial

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Will Inflation Hurt Stock Returns? Not Necessarily

Investors may wonder whether stock returns will suffer if inflation keeps rising. Here’s some good news: Inflation isn’t necessarily bad news for stocks. A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns. Since 1993, one-year returns on

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Maximize Your Charitable Impact with These Four Strategies

As the year draws to a close, it’s a perfect opportunity to rethink how you give to charity. This is important for managing how much tax you pay and how much help reaches those in need. Here are four effective strategies: Need Guidance? Reach Out to Us! These strategies are just a starting point. There

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Understanding How the Top Family Offices Think and Act

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Category: Family Business

In the realm of wealth management, understanding the strategies and decisions of the world’s top family offices can be enlightening. These institutions play an influential role in the direction of global wealth and investment strategies. By comprehending their actions, we can better anticipate market shifts and adjust our planning accordingly.

Key Takeaways:

  1. Sustainability is Crucial: Top family offices prioritize sustainable investments. They believe in not just increasing wealth but doing so in a manner that is eco-friendly and beneficial for society at large.
  2. Digital Evolution: With the fast-paced growth of technology, these offices are keenly focusing on digitization. This not only makes processes efficient but also ensures that they stay ahead in the competitive market.
  3. Navigating Global Challenges: Many leading family offices have strategies in place to navigate the complexities of global politics and economics. This allows them to minimize risks and make the most of global opportunities.
  4. Client-Centric Approach: They prioritize their clients’ needs and design tailor-made strategies. They are dedicated to understanding their clients’ aspirations and aligning their financial goals accordingly.
  5. Diverse Investment Portfolios: Leading family offices don’t put all their eggs in one basket. They believe in diversifying their investments across sectors and geographies to spread risks and tap into multiple growth areas.

In the ever-evolving financial landscape, staying updated and informed is vital. By understanding and learning from the world’s leading family offices, we can adopt effective strategies that resonate with today’s needs and tomorrow’s challenges.

For those seeking assistance in wealth management, we urge you to reach out. At Shah Total Planning, we provide expert guidance tailored to your unique requirements. Whether it’s planning for the future, managing assets, or navigating complex financial challenges, our dedicated team is here to assist. Contact us today for a comprehensive approach to wealth management.

Original Article

Tips for Using GRATs Prior to the Effective Date for 2704 Proposed Regulations

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Category: Estate Planning Family Business

In early August the Treasury Department issued proposed regulations that eliminate or restrict valuation discounts on family owned business under Internal Revenue Code Section 2704. While the regulations will go into public hearing at the beginning of December, it is important to consider the potential impact for family business owners now. government_law_buildings

The potential loss of discounts could be devastating for estate planning purposes. One of the planning techniques to consider in light of this is the Grantor Retained Annuity Trusts, also referred to as a GRAT. A low interest rate environment would increase the probability of success for a GRAT. Currently the 1.4% rate is a low threshold to exceed and makes GRATs useful from that perspective. It is possible, however, that a new administration will pass new tax legislation.

It is also possible there will be a loss of discounts after the year’s end or shortly thereafter when the regulations are anticipated to become effective. GRATs take assets remaining at the end of a trust term to the remainder beneficiaries. This will be the excess of the appreciation of any assets given to the GRAT assets over an annuity of payment includes a return of the principle value of the gift. The appreciation over this hurdle amount is transferred free of gift tax. In order to learn more about how this might impact you, consult with an experienced New Jersey estate and asset protection planning attorney today.

 

Family Business: Steps to a Viable Succession Plan For Your Family Business (Part 2)

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Category: Business Law Business Succession Planning Family Business

There is no doubt that working in a family business can be rewarding, but it might also come with some challenges. With regard to succession planning in particular, here are some of the top tips you need to consider when multiple relatives are coming to the same table on a family business.

Family Business: Steps to a Viable Succession Plan For Your Family Business (Part 2)
(Photo Credit: perthnow.com.au)

  • Make clear goals and objectives. Getting everyone on the same page with where the business “is” and where it’s “headed” is not easy, but you can bring things full circle by thinking about common goals and visions.
  • Create a process for making decisions: Don’t rely on the way you have always done it as a family. You may need more formal structure and written explanations of how decisions are to be made. Don’t forget to factor in your methods for resolving disputes. This can save you time and hassle in the future.
  • Generate a comprehensive succession plan that determines active and non-active roles for family members, establishes successors, and determine if additional support for that successor will be required from other family members. Documenting everyone’s role makes it easier.
  • Have both a business and owner estate plan. Don’t forget one or the other, as they are both important in a family business. Think about minimizing taxes and protecting assets together.
  • Determine the most appropriate avenue for transition. There are numerous options for buyouts or agreements, and this is something you definitely want to discuss with an attorney.

To learn more about how we can help clients with proper succession planning for a family business, call us at 732-521-9455 or send an email to info@lawesq.net.

Steps to a Viable Succession Plan For Your Family Business (Part 1)

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Category: Business Law Business Succession Planning Family Business

Are you planning to keep the Family Business “in the family”? Did you know that family businesses now make up as much as 50 percent of the gross domestic product of the entire country? We’re not just talking about small storefronts or website companies, either. Over one-third of Fortune 500 companies are controlled by families in some sense. It’s critical that as a small business owner, you plan ahead for the future with a succession plan. Here are some of the most common issues facing small business owners with a family connection.

Steps to a Viable Succession Plan For Your Family Business (Part 1)
(Photo Credit: merchantcircle.com)

  • Align your family interests: As members begin to retire or hand off control to other generations, the interest alignment of these individuals becomes all the more important.
  • Generational transitions: Think about the future, because only one third of all family businesses actually end up passing the business on to the second generation. You might want to have alternative plans.
  • Interfamily disputes have the potential to dominate family-owned businesses especially when perception of needs is not lined up between key players. This becomes even more complicated when there is a death or divorce involved.
  • Retirement income: A buyout agreement doesn’t have to be complex, but it is harder to do with a family business because retiring individuals might be more focused on a balance sheet rather than an earnings capitalization model.
  • Estate and inheritance issues: While individual planning is important, there should also be plans in place that relate to the business.

All of these issues are just a sample of concerns for those involved in a family business. Contact our office today to learn more about our Business Succession Planning practice. Email info@lawesq.net or contact us via phone at 732-521-9455 to get started.

Durable Powers of Attorney and FBAR

Categories
Category: Family Business

A new reference guide from the IRS has some guidelines for Reports of Foreign Bank and Financial Accounts (FBAR). There are several issues highlighted in the reference guide that give cause for concern (or for a call to your business planning and tax strategy specialist), but one to note is with regard to durable powers of attorney.

Durable Powers of Attorney and FBAR
(Photo Credit: wtas.com)

Durable powers of attorney are a foundation in a great deal of estate planning, especially when it comes to business owners who either want to preserve their legacy or protect the business and/or a partner in the event of an incapacity. Most of these powers of attorney stipulate authority to sign on behalf of the principal for bank accounts belonging to that individual.

An evaluation of the new Reference Guide reveals that under the description of signature authority, individuals named in those powers of attorney may be at risk for penalties related to foreign accounts of the individual issuing the power and those individuals may inherit responsibility for FBAR filing.

It’s unclear whether a lack of knowledge argument will be applicable in such a scenario, so it’s in the best interest of named parties to be aware of their rights and responsibilities. Since that’s not always possible or reasonable, an estate planning specialist can discuss options directly with the individual creating the durable power of attorney.

To learn more about asset protection, business planning, and risk mitigation, contact us today by phone at 732-521-9455.