Author: John Reagan
We have a lot of planning-obsessed people on staff at HIG and hope it gives you comfort knowing that we are thinking about things on your behalf – even when you aren’t. It’s a huge part of what makes Hill Investment Group different. Don’t be surprised if you hear us talking a lot more in the coming year about the value our planning process adds to our investment management approach. We normally don’t share our client quarterly letters with everyone, but enjoy an exclusive peak this time!
We just had to repost this gem of a blog post from marketing legend – Seth Godin.
By Seth Godin
There’s always someone who is more willing to play the short-term game than you are.
Someone who is willing to cut more corners, send a more urgent text, borrow against the future, ignore the side effects, abuse trust and corrupt the system–somehow justifying that short-term hustle with a rationalization (usually a selfish one) about how urgent it is.
On the other hand…
There’s plenty of room to win as someone who takes a longer view than the others.
Need a push to give to the next generation sooner rather than later? In many cases it makes sense to give your loved ones part of their inheritance when they may value it the most – while you are still here to give it to them. Giving the annual exclusion can move significant amounts of money from inside your estate to your beneficiaries outside your estate. Below is a crude example showing the power of this simple planning idea:
John & Jane have 3 married children and 9 grandchildren:
Gifts to children/spouses per year: $180,000 ($15,000/person * 2 (John & Jane) * 2 (child and spouse) * 3 sets of children)
Gifts to grandchildren: $270,000 ($15,000/person * 2 (John & Jane)
Over 20 years, assuming no change in the annual exclusion amounts, this moves $9,000,000 from inside John & Jane’s estate to outside their estate. Assuming estate taxes are 40%, this saves $3,600,000 in taxes. It also gives children/grandchildren funds much earlier, allowing the gifts to be acknowledged, discussed, and put to use during one’s lifetime.
For more information on gift taxes, visit the IRS page here or connect with a member of our Hill Investment Group team to discuss.