For many ultra-high-net-worth investors, implementing planning strategies designed to help minimize to minimize income and estate, gift, and generation-skipping transfer taxes is a top concern. In the past, limited tax exclusions and credits made it difficult to transfer wealth to both parents and children. However, recent changes to transfer tax laws have opened a new avenue to transferring wealth.
Given the right situation, a Power of Appointment Support Trust (POAST) can help an individual transfer more wealth to multiple family members, making use of the otherwise wasted transfer tax exclusions of a senior family member. A POAST distributes money in trust for the benefit of a parent and children then, upon the parent’s death, assets can remain in trust for multiple generations using the parent’s transfer tax exclusions. In a best case scenario, the individual of wealth has provided for both their parents and children, while also minimizing income and estate taxes.
- The substantially increased transfer tax exclusions could eliminate the imposition of transfer tax for many individuals and open up additional avenues to transfer significant wealth.
- Implementing a POAST with parents (or virtually any other senior family member) can offer great tax-saving opportunities in the right circumstances.
- A POAST takes advantage of transfer tax exclusions that would likely be wasted by the parents and instead utilizes such exclusions for the donor’s descendants’ benefit.
- The POAST uses well-respected, time-tested wealth transfer techniques in a different way to accomplish multiple objectives, including support for less wealthy family members, income tax mitigation, and enhanced dynastic wealth transfer.
Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo & Company.