COVID-19 has provided an unusual opportunity for estate and gift planning for high net worth individuals, their families, and their businesses. Three current conditions make now the perfect time for families to review their estate plans.
The first condition is historically low interest rates, which make more powerful several estate planning techniques. Interest rates affect how wealth transfers are valued. The lower the interest rate, the larger the potential of a tax-free transfer or gift. As a result, gift and estate tax planning using certain types of trusts, such as grantor retained annuity trusts, intentionally defective irrevocable trusts, qualified personal residence trusts, and charitable lead trusts, now are extremely powerful and attractive planning techniques.