Client Memo – Estate Planning
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Two weeks ago the IRS issued proposed regulations that are aiming to eliminate the long-held practice of valuation discounts for lack of marketability and control for fractional ownership interests transferred by gift, sale, or at death to family members.  Valuation discounts are commonly utilized for estate planning purposes when transferring family-owned businesses and can greatly enhance the effectiveness of the current $5.45 million exemption per taxpayer. The IRS has requested comments on these regulations by the first of December and could seek to make them final early next year.  The IRS has long opposed and challenged these valuations discounts in court and has been unsuccessful.  Therefore they are seeking to revise an existing code section to grant the authority to curtail discounting.  We believe that there will be challenges to the IRS authority but are not certain whether it will delay or prevent the implementation of the final regulations.  Until final regulations are issued, valuation discounts are still permitted.

We strongly encourage you to act quickly and contact us sooner than later so that we can assist to take advantage of tax planning strategies before year-end and employing valuation discounts in wealth transfer plans.

Disclosures

Cerity Partners LLC (“Cerity Partners”) is an SEC-registered investment adviser with offices across the United States. Registration as an investment adviser does not imply any level of skill or training.

The information provided is not intended as personalized investment, tax, or legal advice. There is no guarantee that any opinions, projections, or views expressed will materialize. You should consult a qualified professional before making financial decisions.

Information is subject to change without notice and is believed to be reliable but is not guaranteed. For Cerity Partners’ registration status, please visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.

For additional details about our services, fees, or potential conflicts of interest, please request our disclosure statement, including Form CRS and ADV Part 2, using the contact information provided.

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