Your years of hard work have finally come to fruition. Your company is going to go public or your business is going to be sold and what was once a dream is now about to become a reality. This is the time when many entrepreneurs make million-dollar mistakes and forget about their partner Uncle Sam. He has been waiting patiently in the wings for you to get rich; the richer you get, the happier he is.
The United States does not have a wealth tax yet, and it may never have one unless Elizabeth Warren is elected President. However, it does have a death tax and so do a number of states, including New York; the less you plan the higher the death tax will be. Whether your company will be going public or will be sold privately, you will be in a position to potentially save millions in estate taxes by putting a solid estate plan in place to protect your family.
Here’s the bad news: right now, the federal government has a death tax that will take 40% of everything you own over $11,400,000. The amount exempt from tax is scheduled to be cut in half in a few years and possibly sooner, depending on the 2020 election. Many States take a bite as well; for example if you live in New York, the State government has a death tax with rates that could take up to 16% of your assets.
But there’s good news: your company going public or selling your business presents you with an opportunity to potentially save millions in taxes. It also enables you to structure a plan that will benefit your family and provide for their future well-being for many decades to come. For more information and guidance on how this can be accomplished, please get in touch with Robert Birnbaum at rbirnbaum@srf.law or Jodi Zimmerman at jzimmerman@srf.law of our Trusts and Estates department. You can also call our office at (212) 930-9700 to speak with our attorneys.
