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Oxford Financial Group, LTD


Oxford Financial Group, LTD


Expert Perspective

News, research and market insights from our team of experts.


Current Issue | December 20, 2018

Planning in the Face of Uncertainty

By: Julia S. Weaver, J.D., Director, Family Office Services & The Trust Company of Oxford

In this edition of Oxford's e.Insight, we discuss the proverbial elephant in the room (pun intended), as well as some tried and true gifting strategies for your 2016 year-end (and ongoing) consideration.

Tax Reform
In our article, Planning Considerations in Anticipation of Tax Reform, we provide a tabular comparison of income and federal gift and estate tax tax-reform proposals from both President-elect Trump and the House GOP. In this article, we also address critical planning considerations for the uncertain times ahead.

In these unique times (with the anticipation of a drop in income tax brackets), many traditional planning recommendations become reversed. This article addresses strategies to leverage some of these anticipated tax reform proposals to your advantage.

We also discuss the potential for repeal of the federal estate tax and the increasing polarity among planners to either "pause" or "proceed" with certain federal estate tax planning strategies. We make note of the fact that even if the federal estate tax is repealed, it will likely be replaced with a different type of death tax, to wit: a recognition of capital gains upon death (over and above certain exemption amounts). This would be a significant departure from our history of "stepped-up" basis adjustments upon death and could result in continued tax exposure upon death, necessitating ongoing planning considerations.

Tax-Free Gifting Strategies
In our article, The Tax-Burn Strategy – A Unique "Tax-Free" Gifting Option, we begin with a discussion of the various "tax-free" (non-charitable) gifting options. Many taxpayers do not realize that gifts are, generally, taxable. As with all transfers of wealth, and with very few exceptions, the IRS imposes a tax on gifts, not to the recipient but to the donor (a/k/a “grantors”) of the gift.

Beginning with a discussion of annual exclusion and Med-Ed gifting, we also discuss a unique strategy referred to as the “tax-burn”. For taxpayers with federal estate tax exposure, this discussion provides a strategy to enhance wealth transfers to heirs on a tax-free basis.

Your Oxford team of advisors is available to discuss these strategies and considerations for the appropriate planning for each client’s unique situation.

The above commentary represents the opinion of the authors as of 12.15.16 and is subject to change at any time due to market or economic conditions or other factors. This information is not intended to serve as tax or legal advice. As always, tax and legal counsel should be engaged before taking any action.