Private Annuities and Self-Canceling Installment Notes

Private annuities and self-canceling installment notes are both effective wealth transfer planning techniques. There is a present lapse in the estate and generation-skipping transfer taxes, but it’s likely that Congress will reinstate both taxes (perhaps even retroactively) some time during 2010. If not, on January 1, 2011, the estate tax exemption (which was $3.5 million in 2009) becomes $1 million, and the top estate tax rate (which was 45% in 2009) becomes 55%.

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