When to Consider Creating a Foundation With Your Estate
Creating a foundation may be an effective estate planning tool for those who want to preserve their legacy for generations to come. Family members may be able to work as employees of a private foundation, which means that they can draw a salary for as long as the organization exists. Furthermore, there are several strategies that allow you to use your foundation to minimize your estate tax bill.
How to Minimize Your Tax Bill by Creating a Foundation
Any assets that are owned by your foundation are considered to be held outside of your estate. Therefore, they won’t be included for purposes of calculating its value upon your death. Furthermore, up to 30% of the value of any property sold by this entity will be exempt from capital gains taxes.
The Potential Downfalls of Creating a Foundation
As a general rule, your private foundation is considered a separate legal entity. Therefore, you will need to keep detailed records of any donations that it made and any income that it earned throughout the year. Furthermore, there are various IRS tax reporting and accounting rules that must be respected at all times. There is a good chance that you will need to hire an accountant, an attorney and other professionals to make sure that you’re in compliance with these rules.
Financial and Other Professionals May Offer More Insight
A probate attorney in Las Vegas may be able to provide insight into whether it’s worth creating a foundation. An attorney might also be able to review your estate plan to determine if it was created properly. Other professionals such as accountants or financial planners can also help answer any estate planning questions that you might have.