Estate Planning for Unmarried Couples

Julius Giarmarco has written three parts to Estate Planning for Unmarried Couples, Producersweb.com. “Part one of this article addressed non-tax estate planning issues confronted by unmarried couples; and part two dealt with basic gifting strategies for unmarried couples.” Part three focuses on several advanced gifting strategies that may be useful for high net worth unmarried couples. These strategies include:

• Low interest rate loans. You can shift appreciation from the wealthier partner to the other partner by making an interest-only loan. Appreciation in excess of the Applicable Federal Rate passes to the borrower free of gift tax and is excluded from the lender’s estate.
• FLPs or FLLCs. The wealthier partner can make gifts on a discounted basis while retaining some control over the interest gifted.
• Grantor retained income trusts. The wealthier partner transfers assets to a trust while retaining the right to all the income for a certain number of years. At the end of the term, the principal can be distributed to the less-wealthy partner.

For more detail, see Julius Giarmarco, Estate Planning for Unmarried Couples, Pt. 3, Producersweb.com, July 6, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.