Estate-planning | RKL LLP
Posted on: November 15th, 2017

2017 Year-End Tax Planning Guide

With a new year on the horizon, now is a perfect time to examine your unique circumstances to uncover new opportunities to minimize income taxes. As part of our ongoing effort to help clients achieve a more secure financial position, we’re proud to provide a 2017 year-end tax planning guide.

Inside, you’ll find:

  • An overview of critical tax rates and information
  • Key tax considerations for business owners and individuals
  • Individual tax-minimizing strategies
  • Business tax planning opportunities
  • Tax-savings actions to take before the end of the year

After reviewing this guide, contact your RKL advisor before taking any actions. Our diverse expertise means we’re able to help you navigate the complex tax code, identify opportunities and execute accordingly in the context of your personal financial circumstances.

Posted on: August 23rd, 2016

Days Numbered for Common Estate Planning Technique

Days Numbered for Common Estate Planning TechniqueRegulations that would restrict the use of a common estate planning technique are moving through the approval process in Washington, D.C. The U.S. Treasury Department and IRS earlier this month issued proposed regulations regarding a technique used to transfer interests in family businesses at a reduced value. These proposed changes seek to prevent undervaluation of transferred interests, but will result in the elimination of a significant gift and estate tax benefit.

What is the current practice for business transfers?

Under the current laws, transfers by an individual or their estate in excess of the $5.45 million exemption amount are subject to estate and gift tax. For married couples, the exemption amount is $10.9 million. The estate and gift tax applies at a top rate of 40 percent on values in excess of these exemption amounts, so the elimination or reduction in discounts applied to ownership interests will have a sizable impact on the gift or estate tax due.

How would these regulations impact my estate plans?

The proposed regulations under Internal Revenue Code Section 2704 would severely limit the applicability of sizeable discounts commonly applied to ownership interests in Family Limited Partnerships (FLPs) and Family Limited Liability Companies (FLLCs) for estate, gift and generation-skipping transfer tax purposes. Under the new regulations, the determination of fair market value for interests transferred via FLPs and FLLCs would disregard certain restrictions in operating and partnership agreements. This would essentially eliminate the valuation discounts for lack of control and lack or marketability, which often can result in tax-friendly reductions ranging from 20 to 50 percent.

When will these regulations take effect?

The proposed regulations are open for public comment, for a period of 90 days after their initial release on August 2, 2016. The regulations would then take effect 30 days after finalization by the U.S. Treasury. It is important to note that these regulations will be applied prospectively, not retroactively, so there is still time to take advantage of the discounts up until the effective date.

RKL’s Business Consulting Services Group will continue to monitor these proposed regulations. Individuals or businesses in the midst of estate planning projects should consider accelerating their timelines to take advantage of these discounts while they are still fully available. Have questions as to how this may impact your business ownership transfer plans? Contact your RKL advisor or one of our local offices today.

Paula K. Barrett, CPA/ABV, CVA, CGMAContributed by Paula K. Barrett, CPA/ABV, CVA, CGMA, partner in RKL’s Business Consulting Services Group. Paula specializes in business valuation and litigation support services, assisting clients in the acquisition or sale of closely-held businesses and general business planning services. She also has experience in tax-exempt bond financing services, including bond verifications and arbitrage rebate computations.


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Posted on: November 11th, 2015

How to Get the Most Bang from Gifting your Bucks [VIDEO]

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Run-time: 02:55 How can you provide gifts to immediate or extended family members while minimizing the taxes associated with those gifts? Get quick insight on different gifting options that work for your financial goals.

Interested in sharing your financial success with younger loved ones? This is a generous idea, but it is important to be aware of some key considerations before making such a gift. Keeping these three factors in mind can help you avoid unanticipated tax consequences and reap all the intended financial benefits of your gift.

  • Limits. Currently, an individual can gift either during their lifetime or at death, approximately $5.4 million without paying any estate tax. This is known as the estate tax credit. However, there is an annual exclusion that you can take advantage of each year. This exclusion allows you to gift up to $14,000 per individual per year without reducing the overall estate tax credit. This is a great way to enhance your gifting above and beyond lifetime limits.
  • Timing. When do you want to make your gift – during your lifetime or at death? There are pros and cons to giving a gift while living. The upside to making your gift while you are still living is that the amount is taken out of your estate, so it can remove considerable asset value and subsequent appreciation from your estate. Another plus is that you will experience the enjoyment of seeing the recipients use the gift. A downside to a living gift, however, is that when it is taken out of your estate there is no turning back. The funds are gone and cannot be used for your future living expenses as you age. An additional downside to a living gift is that the basis of the gift to the recipient is the same as the donor. If the same asset is transferred at death the recipient gets a “step up” in basis to fair market value. Depending on the asset this could result in a significant difference in gains recognized and the tax when sold.
  • Method. You should consider whether or not you want to gift the funds directly to your loved ones. Often times, gifters are concerned about giving a large financial gift directly to a young person as they may not be mature or sensible enough to use the money for its intended purpose. This is where a trust can help. RKL’s tax professionals often recommend putting the gifted asset into a trust so the funds cannot be accessed until the age you designate. This provides some comfort that the money will be secure until it can be used wisely. Another option, if your recipient intends to pursue higher education, is to use your gift as a contribution to a tax-free 529 college savings plan. This savings vehicle allows contributions to grow tax-free provided they are ultimately used for qualified higher education expenses.

Gifting is a financial maneuver that is very specific to your financial situation. When making decisions and plans, it’s important to talk to an advisor about your unique needs and concerns. RKL has a deep bench of professionals who work with families and individuals to develop detailed estate plans that help them accomplish their financial goals. RKL is here to help – contact us today to get started.

Michael R. DePaul, Jr., EsquireContributed by Michael R. DePaul, Jr., Esq., partner in RKL’s Tax Services Group. Mike specializes in strategic planning and compliance for corporations, partnerships and individuals, as well as services involving estate and financial planning for individuals. Mike is licensed to practice law in Pennsylvania and also has significant experience representing clients before the IRS, state administrative boards and various state agencies.


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Posted on: October 19th, 2015

Why You Can’t Afford to Ignore Estate Planning

Financial Advisor Talking to Senior CoupleMention estate planning to the average individual and you will likely hear one of these common refrains:

  • “I’m too young to think about this.”
  • “I don’t have enough assets to worry about a will.”
  • “I took care of my will decades ago so I’m all set.”

Statistics from the National Association of Estate Planners and Councils bear out this disinterest, showing that 56 percent of Americans do not have an up-to-date estate plan. Without such a plan in place, families and individuals can experience a variety of hardships – from financial to emotional to legal. The good news, however, is that with some advancing planning, the risk of these hardships can be diminished significantly.

National Estate Planning Week was designed to draw attention to the need for this important aspect of financial planning, and encourage Americans to start developing their estate plans. While no one enjoys thinking ahead to the end of life, estate planning allows you to develop a strategy to maintain your financial security throughout your lifetime as well as ensure the intended transfer of your property and assets at death. Knowing you have established a plan to create and maintain your financial legacy and provide for your surviving loved ones can offer tremendous peace of mind.

In the past, the main focus of estate planning was federal transfer taxes, which applied to estates with assets of $1 million or more. Exemption amounts for 2016 increased to $5.45 million per person and $10.9 million combined. In recent years, federal legislation made portability permanent, which changed the landscape for estate planning since many families fall well under the combined estate threshold.

As a result, the estate planning process now places a greater emphasis on nontax considerations, like:

Instead of thinking of estate planning as a chore to be put off to another day, take the time now to visit with a trusted financial advisor or tax professional who can help you take stock of your financial situation and start making decisions about what kind of financial legacy you want to leave.

RKL has a group of professionals who specialize in estate planning for individuals and their families. Contact one of our local offices today to start the conversation.

Scott Myers, RKL Tax ManagerContributed by G. Scott Myers, CPA, CSEP, a Manager in RKL’s Tax Services Group. Scott’s area of emphasis is providing individual and fiduciary tax services for high net worth individuals and their families.  He also serves many closely-held businesses in a wide variety of industries providing advisory services and compliance solutions.



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