Menu ${}${SEMFirmNameAlt}${}${SEMFirmNameAlt}
Practice Areas
Let's Get Started!

Estate planning decisions must respond to tax law changes

Taw laws are constantly changing. It's a classic example of the old adage that "the only constant is change."

In the field of estate planning, the estate tax has been an excellent example of this in recent years. Those changes have greatly affected the estate planning decisions of many people in Massachusetts and across the nation. They did this by greatly increasing the individual exemption available before federal estate tax kicks in.

But it isn't only changes in estate tax rules that have people's attention. It is also changes in federal income taxes.  

And these changes, in turn, play a role in how trusts are best used for estate planning purposes. In practice, this means there are some specific types of trusts that are no longer generally as desirable as they once were. 

For example, as we discussed in our July 15 post, the usefulness of trusts for a transferring ownership in a personal residence has changed significantly over time. Though such trusts may still play a useful role in protecting assets from creditors, they may not be needed as such as in the past in order to minimize estate tax consequences.

It is also worth considering how intrafamily loans can work to accomplish family asset transfers. For example, such loans could be used by wealthy parents who wish to put money in the hands of children who are not as wealthy -- and therefore in lower tax brackets.

When the children invest money from these loans, how is the income from those investments to be taxed? Under IRS rules, such income is taxed at lower income tax rates than it would have been before the loans were made.

Source: The Wall Street Journal, "Estate Planners Turn Focus to Income Tax," Arden Dale, September 6, 2013

Serving businesses and individuals throughout Massachusetts

Braintree Office
25 Braintree Hill Office Park
Suite 406
Braintree, MA 02184

Toll Free: 888-759-5109
Fax: 617-523-5653
Braintree Law Office Map

Cranston Office
200 Midway Road
Suite 159
Cranston, RI 02920

Toll Free: 888-759-5109
Cranston Law Office Map

Hyannis Office
1330 Phinney’s Lane
Hyannis, MA 02601

Toll Free: 888-759-5109
Hyannis Law Office Map

Norwood Office
520 Providence Highway
Suite 10
Norwood, MA 02062

Toll Free: 888-759-5109
Norwood Law Office Map

Waltham Office
375 Totten Pond Road
Suite 200
Waltham, MA 02451

Toll Free: 888-759-5109
Waltham Law Office Map

Westborough Office
276 Turnpike Road
Suite 228
Westborough, MA 01581

Toll Free: 888-759-5109
Westborough Law Office Map

Woburn Office
444 Washington Street
Suite 203
Woburn, MA 01801

Toll Free: 888-759-5109
Woburn Law Office Map

Longmeadow Office
Williams Place
813 Williams Street
Longmeadow, MA 01106

Toll Free: 888-759-5109
Map & Directions