Wealth Actually Frazer Rice

State Estate Taxes -







State Estate taxes can be a nasty surprise- especially with the disconnect between State and Federal Exclusions. Currently, the Federal Exemption stands at $12.92mm per person. 17 states have and estate or inheritance tax and it's often uncoupled from the Federal exemptions.







In New York, the state estate tax exclusion stands at $6.58mm per person- and that exclusion isn't portable with a spouse. With state estate tax rates reaching 16%, this could lead to a potentially big number.







However, planning around this tax can be complicated. Estate Planning Attorney, GEORGE BISCHOF is here to define the problem and the clients it affects, provide some context for planning and give us some ideas on how to deal with it.







George is an Estate Planning Attorney here in New York City at the WILLS AND TRUSTS FIRM (https://thewillsfirm.com/). He focuses on clients between $4 and $20mm in net worth.







Estate Tax









Federal ($12,920,000 per person) vs NYS ($6,580,000 per person)



More New Yorkers can be caught in this than they think







Real Estate can be a big issue











Linkage to Gift Tax (NYS has no gift tax)







Rates (40% Federal vs 16% State)







NYS Cliff - Established in 2014



105% Estate Tax Exclusion is where the cliff kicks in.







Graduated Tax Calculation







Goes back to dollar zero and can be a $250K+ mistake







Calculated on NYS property











NYS has floated a longer phase-out range, no progress yet







Being a City vs State Resident is irrelevant (as opposed to an income tax situation)







Portability – Federal: Yes, NYS: NO!!! (but, Credit Shelter Trusts can be a solution)









Ways to Reduce / Minimize This Tax







Using Charity and a drafting Santa Clause (a conditional formula bequest that leaves money to your preferred charity (or one chosen by your executor or trustee), but only if doing so will result in a higher after-tax estate for your beneficiaries).







Changing your residence AND domicile (and cutting NY linkages!) - See an in depth discussion on this topic with attorney MARK KLEIN - (SNOWBIRD PLANNING EPISODE)







Using Gifting to get "under the cliff amount" (but beware of 3 year look back).







Moving wealth to non-NY jurisdiction







Maximizing “portability” with Disclaimer or Credit Shelter Trust structures









Disclaimer language in wills and/or trusts







Make sure you have an independent co-trustee  









BONUS: I wrote about this topic back in 2019 and it gives some context around the planning. (The numbers have not been updated): https://frazerrice.com/blog/the-return-of-the-nys-estate-tax-cliff/









https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/









 "Frazer Rice is an employee of Next Capital Management,

Crisis Management in the Wealth Space







Lawyers, Accountants, Wealth Advisers and other advisers – are used to dealing with difficult situations all at the heart of their specialty.  But often, the advice the clients need goes past the wealth arena . . . .







How do you help them when you hear situations like this?









* My son shows no drive and won’t get up from bed-







* My daughter is cutting herself-







* My brother just got his second DUI this year and is running the business into the ground-







* The trustee of my trust has missed filing taxes and is making mistakes-









What do you do when you are the first point of contact, but out of your expertise? 







What happens when the family is in crisis and devastating wealth impacts are in view?







What happens when it’s not in your business model or expertise to deal with this part of the family’s issues? How do you do the right thing by your client and yourself?







JANE MINTZ is the person to help us deal with this gaping hole in the wealth management industry.







Jane is an internationally respected pioneer who has spent 20 years working with individuals and families around crises related to addictive illness, mental health, and life concerns. Best known for her work as a concierge strategist guiding clinically complex individuals and their families through extraordinary challenges, she is also a noted thought leader, industry consultant, educator, and speaker who has garnered international recognition. Jane has extensive experience working with family businesses and private family wealth offices so that the dysfunctions of today do not destroy the legacies of tomorrow.  







Jane is a Licensed Professional Counselor with multiple dimension training credentials in high acuity clinical clients. She is a Laurel School graduate (Cleveland, OH) with degrees from Washington University (St. Louis, MO) and John Carroll University (Cleveland, OH). 









https://open.spotify.com/episode/6s4CX5W9qxMtXwRRbBOtUi?si=zvatryXoRUadZirFtJJO4w









Outline







Jane, in a couple of sentences, what do you do as Professional Counselor-







How is your expertise applied to the wealth space? (Family Businesses and Wealth Offices/Trustees)







Crisis









What constitutes a crisis?







What is the difference between a crisis and a mistake (or “growing pains”)?







How does a financial advisor, coworker, wealth manager know when to intervene?







What are we looking for signs and symptoms that someone needs help:  











* Misspending 







* Not showing up for appointments 







* Missed deadlines 







* Disruption in workplace 







* Missed work 







* Inability to participate in large planning matters 









The Intersection of Being a "Fiduciary" and Getting a Client the Help They Need?









What is a fiduciary relationship?  vs. Human Ethics?







When do human ethics supersede fiduciary ethics?  How can a clinical strategist be a key collaborator in bridging the gap between the two?   







What does a professional counselor do?

Why Do You Podcast? And How Does It Help in the Wealth/Law Space?









Why do I do it?







What’s involved?  How does it interact with your career?







Should I do it? (YES- At least try it)







How did you get started and how much does it cost?







Do you make money on it?







Is your ROI on the show different?







Do you use it for research or marketing (or both)?







Do you enjoy it?









Two Advisor Podcast Experiences







I thought I would have BRENT NELSON on the show, so we could trade our two podcasting experiences. 







Brent is the host of the successful and entertaining Wealth and Law podcast and heavily involved in the wealth management space.  This is his second visit to the Wealth Actually Podcast.







He is an ACTEC Fellow and a partner of the Tucson-based RIMON LAW FIRM and focuses on international and domestic estate planning.







For those curious about the world of podcasting and where it can fit into your business or practice, this should be a useful listen from two people who have done it. I liked the idea of two people, who have demanding day jobs, describing their podcasting experiences and how they make it fit within a demanding schedule-









Why we did it?







Why do we continue to do it?







What do you listen to and what did you take for inspiration?







What's your process?







What started off poorly and has gotten better?







How much time / resources / workflow does it take?







What functions do you keep / what do you delegate?







How do you measure success? How do you "monetize?" Business model? Advertising?







What do you wish you had? Struggles with audience building-







Weird stuff like music / disclaimers?









The Wealth and Law Podcast:









https://open.spotify.com/show/3bQK3jsLsacNqryQKQuSRG









I am also adding this excellent primer on "HOW TO PODCAST" from my friend, Jason Cilo of Meeting House Productions- it goes into some depth on the "Who, What, Where, When, Why and How" of the process from a person who does an extremely professional job on his show. It is well researched and serves as an ode to his passions in the TV and Film world. Well worth the listen: FULL CAST AND CREW: HOW TO PODCAST









https://open.spotify.com/show/1UTZzSo2oPXBxn94UrIjO1









Some of the Podcasts Mentioned:







Errol Louis ("...

In this episode, I recount my experience in taking the plunge and jumping from a stable, large bank job to swim in some different waters. "Funding the Pivot" was written a few years ago as I was doing the post-mortem on my post-book experience. I think the lessons I learned can help a lot of people. This format a bit of an experiment for me in non-interview podcasting- let me know what you think of it. The transcript of the essay is below- thanks for listening!







Follow me on TWITTER LINKEDIN YOUTUBE and INSTAGRAM, Don't forget to SUBSCRIBE/like/rate the show and feel free to send along to your friends.









https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/









Funding The Pivot







We live in a world where we are bombarded with advice to “follow your passion” and stories of people who wonder about the road not taken.  In fact, more people in their prime earning years are taking steps to fulfill their “dreams” before they reach the brass ring of retirement- a time normally associated with doing all of the things you didn’t have time to do.







What happens when you aren’t close to retirement and want to make a career switch or start up a new business? What is realistic? How should you think about the risks so that you avoid a crippling financial decision?







As clients and friends have come to me with this issue, I have taken my personal experience and some financial planning concepts to put structure around what can be a high risk, but high reward decision.







The Assessment and the Plan







Many of us daydream about a better tomorrow . . . better finances, more control of time, health and family happiness, a clearer path to professional or extracurricular achievement and establishing a legacy. These things don’t come without costs and the risk of failure. Therefore, you need a plan.







The first step is to assess the situation at hand.







Are you running from something or running to something?







Do you have an idea that will change an industry (or the world)? Do you want to start a business (and the hell that being an entrepreneur can bring) or do you just want to enjoy the trappings of a well-oiled business machine (already put in place)?  For those making career decisions because of an unpleasant work environment, I would think twice about running headlong into entrepreneurism.  It is a long and lonely road.  You have to “really want it” and be prepared for sacrifice both personal and financial.  Can the same itches be scratched while being traditionally employed? If your current situation is dissatisfying, could the correct change be a move to a firm that is more in keeping with your goals and principles?







I had a little of both in my life and used parts of the creative process, the entrepreneurial experience and a corporate situation to move my situation ahead.







My situation at my previous employer was suffocating.  I enjoyed working with clients, solving problems, identifying opportunities and being relevant to successful people. However, while enjoying success, I was not participating in the equity or direction of the business and I was no...

The FAMILY OFFICE – a term that is surrounded by mystique.







It conjures notions of massive wealth, mahogany infused offices, private jets and money that has reached escape velocity. When one probes deeper, it connotes secrecy, exotic opportunities and risks, mixed with rigid control and discretion.







But what is the reality behind the term “family office”?  At what level of wealth do families bring it all in house?  What functions do they actually perform?  How much do they cost?







For families that are intrigued, what questions should they ask before going down that process and what should they focus on? 







We’re going to speak with EDWARD MARSHALL, Head of the Global Family Office at Dentons, the international law firm.  Ed has deep experience in the space and is a terrific starting point for families looking to engage the process of developing their own structure.







Ed and his white papers and research can be found at DENTONS' site here: ED MARSHALL and his twitter account is here: ED MARSHALL TWITTER. A link is here for his informative book (with Bill Woodson): FAMILY OFFICES: A COMPREHENSIVE GUIDE FOR ADVISORS, PRACTITIONERS, AND STUDENTS







Here are some of the areas we hit on:









* When a client comes to you looking for a family office, what problems are they trying to solve?







* What is your process for helping them define what they need?







* Why not outsource everything?







* How do you make this a digestible process?







* Build, Buy, or Partner?







* Cost







* Talent







* Confidentiality







* Regulation







* Scope Creep







* The Rule of 3:



* It's could take 3 years to build







* It could costs $3 Million







* You will probably want to shut it down 3 times before it's up and running













Below is a brief summary of the question and answer process from Dentons to help families get their bearings around the family office process:







Focus areas









* Getting started







* General Investing







* Investing and owning real estate







* a href="https://www.dentons.com/en/insights/articles/2022/january/18/family-office-strategic-considerations-pivotal-questions-family-offices-shoul...

We are now into 2023 and it's turning into is a unique wealth planning environment







Families are dealing with volatility and depressed asset values. We have extremely generous Federal Estate Tax Exemption levels for the next couple of years (we think!)-







Most intriguingly, we are witnessing rising interest rates which are bouncing hard off of generational interest rate low. Since interest rates are an important driver of many strategies, the effectiveness of many popular estate planning tools is up for review. Furthermore, some “out of season” techniques are getting a new look.







To help survey the landscape is MATTHEW HOCHSTETLER. Matt is a Partner at David J Simmons and Associates which based in Canton, Ohio and Naples FL







Matt is an ACTEC Fellow and well qualified to help us think about the current environment







Welcome Aboard Matthew-







Matt's Background and Practice







The Rising Interest Environment-







What rate are we using?  AFR and 7520 Rates







How does it work?  Monthly reset?







Where were we (From 2010 to 2021 historic lows that went under 1%) and where are we now (Near 6%)?







Strategies for a low-interest-rate environment







Lending to transfer wealth with little or no gift tax. The interest rate reflects the hurdle that appreciating assets must beat to be effective for some estate planning techniques to be effective.







Intrafamily-loan 







Installment Sale to an Intentionally Defective Grantor Trust (IDGT)







Grantor Retained Annuity Trust (GRAT) 







Charitable Lead Trust (CLT) 







Strategies for a high-interest-rate environment







You may be able to capitalize on strategies whose benefits hinge on using higher interest rates to reduce the actuarial value of a taxable gift. The higher the rate, the more beneficial these strategies will be.







Qualified Personal Residence Trust (QPRT): 







Charitable Remainder Trust (CRT): 







This is the reverse of a CLT; the grantor receives an annual payment from the CRT for a term of years, and charity receives whatever remains at the end of the term.







Any other thoughts around planning in 2023 and 2024 with the sunset provisions looming at the end of 2025?







Start Your Thinking Early!







Law Firm and Valuation Firm Capacity may get stretched thin by 2025 as people delay







It is easier to top up previously implemented strategies than establish new ones on the fly.







HOW DO WE STAY IN TOUCH?







TWITTER: @MRHesq







LINKEDIN









https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/









Frazer Rice is an employee of Next Capital Management, LLC.







This podcast is not investment, legal, or tax advice, nor does it reflect the opinions of Next Capital Management.







Any opinions represented in the show are Frazer’s individually and not an endorsement of the guest."







This podcast is for educational and entertainment purposes....