This article originally ran New Jersey Business Magazine's December 2022 issue. All rights reserved.
A Time for Legal Trusts
A declining stock market, inflation and an upcoming decreased federal gift and estate tax exemption may make it an ideal moment to utilize trusts.
George Saliba writes, "And a declining stock market, which includes an S&P 500 stock market index down more than 20% this year, may also facilitate the use of trusts: Gifting stocks into trusts not only removes those assets from one’s estate, but also captures future stock market growth within those trusts, for the trusts’ beneficiaries, explains Courtney E. Dolaway, a member of Flaster Greenberg PC’s trusts and estates, taxation, and business and corporate departments.
High inflation may be another reason to consider leveraging trusts. Dolaway says, “With inflation, a lot of assets are going to appreciate, and any time you have appreciating assets, [for] those that have been gifted to a trust … that appreciation is outside of the grantor’s estate."
For choosing the correct trust, Courtney said, “For every income level or principal level, there are different trusts that may be suitable for every client,” Flaster Greenberg’s Dolaway says. “And that’s why we have our estate planning meetings with people where we talk about their wishes, desires and assets. We kind of do a full scope review, because, for example, if you have a child with a disability … you don’t [need] a million dollars for a special needs trust to make sense.”
Courtney E. Dolaway is a member of Flaster Greenberg’s Trusts & Estates, Taxation, and Business & Corporate Departments. She concentrates her practice on complex estate planning, estate administration, business succession, and general corporate matters. Ms. Dolaway also serves as chair of the firm's Women's Initiative Committee. Prior to joining the firm, she practiced at a boutique estate planning firm.