Estate planning typically focuses on passing assets to younger generations. However, a smarter tax strategy might be to leave those assets to your parents instead. This approach is the essence of a resourceful technique known as Upstream Support Trust (“UST”) planning.
What is Upstream Support Trust Planning?
UST planning avoids paying capital gains tax on low basis assets – benefiting you during your lifetime – by using another person’s otherwise unused estate tax exemption upon their passing, so that your assets receive an accelerated step-up in basis at their death. By reversing the usual flow of estate transfers and using the shorter life expectancy of older generations, this method can significantly minimize income taxes.
Does UST Planning Apply to You and Your Family?
- Do you and your spouse have low tax basis assets (i.e., closely held stock, LLC units, partnership interests, crypto assets, mutual funds, marketable securities or real estate)?
- Are you hesitant to sell due to capital gains tax consequences?
- Do you have an elderly or physically unhealthy parent, other relative or friend, who is creditor-free?
- If this relative or friend is a resident of Illinois, does he or she have a taxable estate worth less than $4M?
- If this relative or friend is a resident of a state without estate tax, such as Florida, does he or she have a taxable estate worth less than $13.99M?
- Do you have a good personal relationship with this relative or friend?
If the answer to any of these questions is “Yes”, then Kelleher + Holland, LLC can help you!
Watch This Short Video on Upstream Support Trust Planning
KH Can Assist You with Upstream Support Trust Planning
Don’t wait to secure your financial future. Contact Kelleher + Holland, LLC today to schedule a consultation and discover how UST planning can transform your estate planning strategy.