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■ Basis: Estate planning has taken on a new focus on the search for basis, i.e., maximizing the assets included in your estate (or others you select) so that the tax basis on which gain or loss is increased on death to the fair value of those assets (i.e., capital gains are eliminated).While there is lots of talk about this how much cost and complexity are you willing to tolerate to accomplish this?Most folks seem to feel that once the documents are signed their good to go. If you meet your wealth manager semi-annually, at least one of those meetings should have your CPA and attorney in attendance.
You will grow the value of those assets outside your estate, you’ll pay the income tax on trust income reducing your estate, and your estate will be reduced by interest charges. What if the securities the trust invests in with the fund borrowed plummet in value?
What techniques do you have the comfort to agree to?
Have you reviewed with your professional advisers all the myriad of issues that might arise using these techniques?
Another common basis maximizing technique is to borrow money on appreciated assets and gift the borrowed funds away.
This is particular useful to avoid tax in a decoupled state that has no gift tax (e.g., New Jersey).