On August 4th, 2016 the IRS proposed new regulations that reduce the ability to use valuation discounts, such as minority and marketability discounts, in transferring family business interests to family members. See 81 Fed. Reg. No. 150, p. 51413 (August 4, 2016). Such discounts have been used where families desire to gift business interests faster while using the annual gift exclusion amount. This is typically done where an estate would otherwise be estate-taxable, which today means estates larger than approximately $5.45 million per person or approximately $10.9 million per married couple. See I.R.C. § 2010(c)(2) & (3). The proposed regulations may become effective by the end of 2016. Gifting completed before the new regulations are effective should be protected under the current rules.
Several other laws have changed over the past 10 years, which may affect your estate planning. If your estate plan has not been reviewed in the past 3 years, feel free to contact Shelley Thompson in our office for a courtesy appointment to review your estate plan, direct: 303-414-0734.
