I remember my naïve days when I thought that the only thing a student of the markets needed to figure out was the assets that performed best. If something grows at 15%, it is going to beat something that grows at 11%. Something I completely underestimated in my early analysis of estate management is the role that the tax code plays in shaping returns. This is especially true when trying to figure out the most effective ways to pass on assets to kids and grandkids. This is an area where the *structure* of the holding can have a greater determinative effect on how much wealth is transferred than the actual growth of the underlying holding itself.
The importance about holding structure has been reinforced in my mind as I have studied qualified personal residence trusts, a rare type of irrevocable trust that allows the original owner of a primary home … Read the rest of this article!