The depressed values in the markets, low interest rates and historically high federal estate, gift and generation-skipping transfer tax exemptions have created some excellent opportunities for you to make impactful gifts to your family and generate potentially significant tax savings. Below is a brief summary of some wealth planning tools that may be applicable to your situation.
The mid-term AFR rate for May 2020 is 0.58% (for loans of up to nine years), and the rate for longer loans is 1.15%, making this an attractive time to make these loans to the ones you love. If you already have an intra-family loan in place that has an interest rate higher than the current rate for May, consider re-financing the current loans using the lower interest rate.
Take advantage of current planning opportunities
Now is a good time to explore planning ideas that are effective in the midst of a market downturn. In part two of this series, we will explore other tax planning opportunities for the current market situation. For more information on wealth planning strategies for individuals and families, please contact your Warner estate planning attorney or Mark Harder, Chair of our Private Client and Family Office Practice, at 616.396.3225 or mharder@wnj.com.
