Estate Planning and Tax Strategies

You know the Benjamin Franklin quote “there are only two things certain in life: death and taxes.” All of my estate planning appointments have some consideration of taxes. We are faced with sales tax, income tax, estate tax, capital gains tax, gift tax and property tax to name a few. Even smaller estates still have tax considerations. With the 2020 year coming to a close, we are thinking about what options we have available to us to minimize our tax bill, both now and at death.

Many advisors and accounting firms put out year-end tax tips that can help you minimize income taxes. I am able to participate on the board of the Brainerd Lakes Area Community Foundation where they host webinars and workshops throughout the year that highlight various charitable giving strategies that can support your charitable giving and also help you minimize your taxes. It is always good to refresh ourselves on the options and learn about new opportunities too.

From an income tax perspective, there are basic strategies like comparing standard versus itemized deductions or contributing to your retirement plan to reduce your taxable income. Combining income tax reduction with the charitable world of donor advised funds, can result in the use of the “bunching of gifts” to every other year or every few years to take advantage of the charitable deduction in certain years and use the standard deduction in the other years.

You may be considering the best way to transition appreciated real estate to the next generation. Depending on your estate size, you may be able to accomplish a transition of a portion of that to the next generation with low to no estate tax and still accomplish a gift to your favorite charity with the use of a charitable trust. You get an immediate tax deduction, establish an income stream to one or more beneficiaries and also benefit your favorite charity. Are you looking at selling your business and don’t want to take a large tax bite? Again, you may want to consider a donor advised fund scenario and save some taxes.

Do you have income needs and are tired of collecting a low or “safe” interest rate on some of your investments? Have you considered a charitable gift annuity? The “stretch IRA” was a popular tool to extend the benefits of a tax-deferred account to a non-spouse at the death of the account owner. However, with the SECURE Act changes, the opportunity was dramatically reduced to a ten year deferral window. Is a testamentary charitable remainder unitrust another option to help you replace this “stretch IRA” option?

There is an upcoming workshop on Thursday, October 29, 2020 via ZOOM that will address estate tax planning, tax savings opportunities from the CARES Act, year-end strategies and legacy and charitable giving options. You can check out the details and registration information at

There is not a one size fits all to planning and this article barely scratched the surface on this topic. But, hopefully it gets you thinking about ways in which you can save some money and possibly have some charitable contributions too.

Please send me an email at with any topic suggestions or requests you may have. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.