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.


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.




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