Accounting

A new plan

By Meredyth McKenzie

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Brian Bornino, CPA/ABV, CFA, CBA, Director of Valuation Services, GBQ Consulting LLC

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The current economic recession has created several new opportunities in estate planning. Values of certain assets, such as businesses, marketable securities and real estate, are lower now than they were a year ago. This allows you to transfer more of each asset for a lower amount.

But there are people who have decided not to take advantage of these new opportunities and put off estate planning. They may not feel as wealthy, may have lost some wealth because of the economic crisis, or don’t feel as if their assets are valuable or won’t be increasing in value anytime soon. But it’s important to be proactive and start planning now.

“You want to take advantage of these low values and gift and transfer wealth now while you can still lock these values in,” says Brian Bornino, CPA/ABV, CFA, CBA, director of Valuation Services at GBQ Consulting LLC.

Smart Business spoke with Bornino about how to take advantage of the new opportunities in estate planning and different solutions for dividing your assets up equally among family members.

What are some key things to remember when gifting or transitioning wealth?

There are so many techniques and strategies that you can get bogged down in the details. It’s important to sit down with someone you trust and walk through your goals. Whom do you want to receive this money, what’s the ultimate estate plan, and who’s supposed to end up with your current assets?

Devise a plan that you’re comfortable and happy with. A lot of times advisers try to sell clients complicated plans that may provide better results, but may leave them uncomfortable. You need to be happy and comfortable with the plan, and understand that your money is being taken care of in the right way after you pass away.

How do you take advantage of the new opportunities available?

Gifting of shares needs to be based on a fair market value. When values are low, a greater percentage of your business may be transferred without triggering the gift tax. For taxable gifts, the gift tax will be lower because of today’s lower values. Values when planning for real estate can also go up and down with the economy. Values are generally down now, so it’s a good time to have real estate appraised and do transactions with real estate based on this lower value.