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Estate Planning Tools to Put to Work in a Higher-Interest Rate Environment

The Legal Intelligencer | February 19, 2019
By: Kevin Koscil and Franca Tavella

The federal funds rate was raised to 2.5 percent at the end of 2018, and it is expected to continue to rise in the coming months and years. The federal funds rate has a direct affect on many other interest rates which can ultimately impact one's estate planning goals. Specifically, as interest rates rise, there will be corresponding increases in the Applicable Federal Rate as well as the rate prescribed by Section 7520 of the Internal Revenue Code (the Section 7520 rate), both of which are used to determine the tax implications of certain gifts and other transfers for federal transfer tax purposes. Accordingly, estate planning practitioners and other advisers should clearly contemplate how interest rate sensitive planning techniques are impacted in this changing environment. 

Kevin Koscil and Franca Tavella discuss selected gift and estate planning techniques in their recent article Estate Planning Tools to Put to Work in a Higher-Interest Rate Environment.

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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