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Estate and Tax Planning for High Net Worth Individuals


By: Janice Dantes


While I do some estate planning in my practice for middle class Filipinos, occasionally, I will encounter individuals with multi-million dollar estates. Large estates encounter issues that may not impact smaller estates because there is an element of tax planning. If you or someone you know has an estate larger than $1M, below are some issues to keep in mind.

1. Do you live in a community property state? Currently, there are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Illinois is not a community property state. When you live in a community property state, any assets/debts you acquired during the course of the marriage is considered marital property and subject to an equal division. In a state like Illinois, assets/ debts you acquired during the marriage is presumed to be marital but you can debunk this presumption with evidence. Therefore, Illinois only requires an equitable division. What this means is that if you live in a state that is not a community property state and want your assets to go to your spouse, you have to make it clear that is your intention because it is not assumed. If this is not clear in your estate planning documents, you could lose out on tax protections designated for married couples.

2. Gifts. While Filipinos freely give gifts without thinking of tax consequences, please be aware of very large gifts. Currently, there is an annual gift limit of $15,000 per individual per year. Currently, the lifetime gift tax exemption is $11.58M. This means that you can give gifts up to $15,000 per year and $11.58M in your lifetime with minimal tax consequence. However, if you exceed these limits, you will have to file the appropriate documentation on your tax returns.

3. Foreign representative. As Filipinos, we have family throughout the world and sometimes are closest family and friends live in different countries. While you can appoint anyone to serve as your representative after you have passed away, keep in mind that there may be tax issues if you appoint a foreign representative. There is a fear from the U.S. government that your estate can leave the country without paying taxes. There could also be tax implications in the country where you representative resides.

4. Gifts to minors and disabled individuals. You may want to make sure grandchildren or individuals with special needs in your family are taken care of. Keep in mind that gifts made to these individuals may require a guardianship who will manage any gifts as trustees of their trust. Further, if a disabled relative is receiving government assistance, a large inheritance can impact their benefits. Be sure that you discuss these issues with an estate planning lawyer.

5. Powers of Attorney. Be sure to execute your powers of attorney for healthcare and property. No one knows if they will die peacefully in their sleep, fall into a coma after an accident, or suffer from dementia, Alzheimer’s, or other disease that may affect your ability to make healthcare and financial decisions for yourself. These documents can prevent the cost and inconvenience of a guardianship where the court will oversee how your money is being spent.

If you have any questions about estate planning, please contact me at (312) 546-5077 or janice@

Thank you for reading. Until we meet again, love one another.

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