Angel investors and estate planning

Georgia investors who are creating an estate plan might look at how they can use trusts and other vehicles to help preserve wealth and teach their family about financial matters. Angel investors might have particular needs when it comes to creating estate plans. For example, since they often do not receive regular statements, they might want to keep careful records so their family can track those investments.

Another consideration is avoiding estate tax. As of 2016, the lifetime estate and gift tax exemption is $5.45 million for individuals and $10.9 million for married couples. People can give assets as gifts to loved ones when those assets are worth less rather than allowing them to appreciate and take up a larger portion of the estate tax exemption. Shares from angel investments may be placed into trusts that are earmarked for specific purposes such as education or buying a home.

Placing portfolios into a trust can be a way of teaching adult children about investments. The family can work together to choose companies. Charitable planning is another consideration. Unlike gifts to family members, charitable gifts may be best given after they are fully appreciated to avoid capital gains.

Whether or not people are wealthy or investors, a trust may be a useful part of an estate plan. For example, a person might have a beneficiary who is unable to work due to disability. That relative might rely on government benefits, and an inheritance might imperil those benefits. However, it may be possible to set up a trust to pay expenses such as rent directly from the trust without having an impact on the benefits, and an attorney can be of assistance in this regard.

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