“The old style of tax reform is obsolete in a 2012 world.” –Senator Charles Schumer
New York, NY (PRWEB) October 11, 2012
At the end of this year, not only will millions of people owe up to 20% more in taxes, but, their options for asset protection will be significantly worse, as everything over $1 million dollars will be subject to the highest rate of taxation due to the Bush Tax Cuts.
People are often known to procrastinate about their succession planning strategies since the inescapable future (you can’t take it with you) must be formally addressed. However, not facing the inevitable could be costly. A family office addresses tax planning and asset protection in a strategic manner.
“Investors are looking for estate planning strategies cost effective which allow them to keep more of their hard-earned money. It’s bizarre that the looming expiration of the Bush Tax Cuts, which translates into a greater tax burden in 2013 and beyond, isn’t being widely addressed,” says Steven Abernathy, Chairman of the Board and co-founder of the Abernathy Group II Family Office. “Why isn’t the news covering this given that it’s an election year?”
The anticipated 2013 tax increases, resulting from the expiration of the Bush Tax Cuts, will mean massive changes ahead not only for high net worth individuals, but, those who consider themselves members of the middle class. President Obama has stated on numerous occasions that he will not seek to renew these cuts. So, on January 1, 2013, the gift tax exemption amount falls from $5 million to $1 million. For everyone. Given the time it requires to design and execute proper estate planning measures. According to The Abernathy Group II Family Office, a game plan must be in the works now. If one is not, as 2013 begins and the Bush Tax Cuts are no more, investors will owe as much as 55% in estate taxes, or, pass that cost on to heirs.
Even if a greater public dialogue were happening, there still would be no guarantee that Congress, which has the power to reverse President Obama’s decision, would do so. And, while Estate Planning is routine among the top earners in the country, the dramatic drop in the exemption amount from $5 million to $1 million ($2 million for a married couple) affects everyone’s estate planning at or above this level.
The gift exemption will not be better next year and is likely to be far worse. The best and simplest ways to both legally reduce taxes and avoid double whammy of the scheduled increase and the decrease in exemption is to review all assets with a professional authorized to set up the necessary structures to protect your wealth. It will cost the same amount, or less, to structure your assets this year versus later on. Why not do it now, when taxes are substantially lower? If anyone found out their investments would be worth 55% less on January 1, 2013, they would probably take action.
Steven Abernathy and Brian Luster co-founded The Abernathy Group II Family Office and the country’s first Physician Family Office (PFO). The Abernathy Group Family Office sells no products, receives no commissions, and is independent, employee-owned, and governed by its Advisory Board comprised entirely of thought-leading physicians. Find them online at http://www.abernathygroupfamilyoffice.com.