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Now is a good time to review Kent business owner estate plans

As readers in the Seattle area may know, the current gift tax exemption stands to expire at the end of the year, and so far, Congress has shown no particular interest in acting to maintain the current exemption level. Estate planning professionals have been urging people to consider their options for taking advantage of the exemption before the end of the year, but business owners need to act sooner than others to make sure not to miss out on potential inheritance tax advantages while they last.

One of the primary concerns for business owners should be an accurate and reliable valuation of the business. Even a contractual agreement as to the value of a business may not hold up under IRS scrutiny. The IRS wields broad authority to ignore business valuations, and the burden falls to the business owner to support a claimed value.

A reliable appraisable conducted by a credentialed professional can go a long way toward effective estate planning with fewer risks of unpleasant surprises. With talk in the air about eliminating discounts for minority interests, even a slightly disappointing appraisal may be a good deal in the long run.

Once the business has been reliably appraised, consider trusts as an option for gifting stock or business interests. Trusts come in a variety of forms that offer broad flexibility in terms of controlling interests, making fair distributions among family members and offsetting estate taxes.

Last but not least, double check life insurance coverage. Life insurance can serve as a vehicle to absorb estate taxes and provide for family members not involved in the business. An estate planning professional can help ensure that payment of life insurance premiums does not have the unintended consequence of converting trust assets into assets subject to probate administration.

The year is drawing to a close, and last minute efforts rarely lead to effective estate planning. Kent residents may want to consider acting soon to make sure that they have well-considered plans for carrying today's options and advantages into the uncertain future.

Source: Forbes, "A Wellness Checkup for Your Estate Plan," Steve Parrish, Aug. 7, 2012

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To speak with an attorney at Gellner Law Group about estate planning, probate, trusts, wills or tax controversy, contact our law office in Kent, Washington, today. You can call 425-336-2908 or send us an email. We provide representation across the entire Seattle-Tacoma metropolitan area.

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