CLATs are typically structured to attract no estate tax while at the same time passing any total return in excess of the IRS “discount rate” (aka a “hurdle rate”), now at a low 0.8%, Joyce said. “If the asset or portfolio inside the CLAT produces greater than an average of 0.8% per year, then such return above the hurdle rate will pass tax-free to a trust for future generations,” he added.

Separate from tax planning are the opportunities to cut estate taxes. “The hit to the economy is reducing the valuation of not just equities but privately held businesses,” Wittenberg said. “Wealthy individuals can use their lifetime exemption and get more bang for their buck, gifting potentially temporarily low valuations of their business ownership to the next generation or in trust.”
 

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