When interest rates are low, it’s high time for estate planning -
Interest rates remain at record lows, and while many experts believe they’ll begin to rise soon, it’s likely they’ll rise slowly. So it’s an ideal time to implement estate planning strategies that are most effective in a low-interest-rate environment.
Make family loans -
Lending money to a family member is a simple but highly effective estate planning strategy. Although the IRS often scrutinizes these transactions to be sure they’re not disguised gifts, careful planning will help you avoid an IRS challenge. It’s important to treat the loan just like an arm’s-length transaction between unrelated parties. That means charging interest at or higher than the applicable federal rate (AFR), executing a written promissory note and taking steps to collect the payments.
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