Using Debt as a Tool in Estate Planning

Using Debt as a Tool in Estate Planning

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The practice of estate planning is more than just the preparation of Wills, Trusts, Powers of Attorney, and Living Wills.  We also consult with many clients regarding how to structure their wealth.  This could include creating entities such as limited liability companies, partnerships, or corporations.  However, it can also include how to manage debt and use debt as a tool in estate planning.

Since we are not investment advisors and do not sell debt products, our attorneys can be a great resource. We can provide an independent analysis with respect to the benefits (or pitfalls) of entering into a sophisticated debt transaction. We can also help you understand how it will fit into the overall estate planning picture. Furthermore, we can provide feedback with respect to the estate tax, gift tax, and capital gains tax benefits of such transactions.

I recently came across a good video that simplified this complex topic, so I thought I would share it.  In particular, I recommend watching the last part of the video which talks about a strategy known as “Buy, Borrow, and Die” as a way to grow wealth for your descendants. Here is the link to the video: https://youtu.be/leDGAODpZfg

Disclaimers: I have no affiliation with the producers of this video and I do not claim any rights to it. Since borrowing can be inherently risky, we strongly recommend educating yourself on how to use debt as a tool prior to entering into any borrowing strategy.

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