The effectiveness of many tax and estate planning techniques is directly linked to the applicable federal interest rate. With the change in AFR from nearly zero to now over 5%, practitioners are starting to revisit previously abandoned techniques and reevaluate current plans that could benefit from possible modification. In this course, we will examine how the change in interest rate makes certain estate planning tools such as CRTs and QPRTs more attractive and other tools such as GRATs and IDGTs less attractive. We will also examine the options clients have to modify current plans to take advantage of the changing rates. In addition to estate planning techniques, we will also discuss more informal planning considerations surrounding tax deductions and income tax mitigation during these higher interest periods. A general understanding of estate tax and estate planning will be helpful before taking this course.
Topics Covered
- Explain of the difference between the various estate planning techniques used in high and low interest environments
- Description of how estate tax savings can be achieved by using advanced estate planning techniques
- Identifying opportunities for clients to modify their current plans to take advantage of higher interest rates
- Summarizing the benefits and detriments associated with higher interest rates for clients seeking tax saving estate planning opportunities
- Analysis of the preferable planning opportunities to assist clients to achieve their goals
Learning Objectives
- Understand how interest rates impact the selection of estate planning tools particularly as they relate to estate tax mitigation
- Identify the interaction of the AFR with the calculation of discounts and remainder interests
- Analyze the best estate planning tools for high and low interest rate environments
- Advise clients on the pros and cons of using certain estate planning techniques to harness the power of higher interest rates
- Describe the importance of examining current estate plans to identify options for modification
Level
Intermediate
Instructional Method
Group: Internet-based
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
A basic understanding of gift and estate tax will be helpful before taking this course.
Advance Preparation
None
Instructor
Klaralee R. Charlton
Klaralee Charlton is a Partner at 3i Law in Denver, Colorado. She practices fiduciary tax, estate administration, and business transactional law. As part of her practice, she guides clients through the process of administering a loved one’s estate including the collection, valuation, management and transfer of assets including financial accounts, real estate, and business interests with a focus on minimizing estate and income tax liability. Klaralee also works closely with trustees of ongoing trusts to ensure compliance and prepares clients’ fiduciary income tax returns annually.
Klaralee has written and lectured on topics including estate and gift tax, fiduciary income tax reporting and U.S. regulations governing the valuation of small family businesses. She is an active member of the Colorado Bar Association, Tax Section and Adjunct Profession at the University of Denver, Graduate Tax Program.
She earned her J.D. in 2011 from the University of Utah, S.J. Quinney College of Law, her LL.M. in Tax Law from the University of Denver in 2013, and her B.A. in political science in 2009 from Bryn Mawr College. She is admitted to practice in both Colorado and Montana.