BMO Family Office
There’s a tax implication behind every investment and transaction. That’s why we take a year-round approach to our tax planning strategies.
We build relationships and connect with anyone in your family with an important perspective to share—from the heads of household to the heirs.
Understanding the effect of taxes on your wealth right now is important. But knowing its impact on your future is critical. We’re focused on both.
We’ll work collaboratively with external advisors, including your tax attorney and accountant, seeking to ensure every aspect of your tax-planning strategy is smart and sound:
Our wealth advisors have deep experience in reviewing a client’s current situation, working with a tax professional and then offering recommendations to help reduce tax liabilities.
Your estate tax options will vary based on your unique circumstances. We can work with your tax professionals to develop and implement a strategy for reducing estate tax liabilities for you and your beneficiaries.
If you’re younger than 72 years old, you have flexibility on how much and from which accounts you take withdrawals. Conventional wisdom is that you start with your taxable accounts, then switch to your tax-deferred retirement accounts, and leave your tax-free accounts for last. There are other strategies, but you should always discuss them with your tax professional and wealth management team to ensure they’re properly executed.
Under current tax law, the standard deduction was increased to $24,000 for married couples. Taxpayers who don’t itemize their deductions are limited to a $300 above-the-line deduction to receive a tax benefit (effective in tax years after 2019). Taxpayers who donate more than $300 but not enough to exceed the standard deduction need to consider alternative gifting strategies. A BMO wealth advisor can discuss options.
There is a significant benefit in gifting stock in-kind rather than selling it and contributing the net proceeds. You avoid paying any tax due on the sale of the stock and if the charity sells the stock there is no tax since the charity is a tax-exempt entity. If the donation helps you itemize and you’re trying to offset windfall gains in the same year (e.g. the sale of your business), then all the better. Make sure you keep an eye on the current-year deduction rule. Right now, appreciated securities are limited to 30% of your adjusted gross income, but the excess can be carried forward to a future year. For more information, contact us.
If you named a trust as the beneficiary of your IRA, and thought the “stretch” provisions would enable your heirs to take required minimum distributions (RMDs) based on their life expectancy, those rules are no longer in effect. IRAs must now generally be depleted within 10 years by a designated beneficiary. You can apply other measures to provide for your heirs, but don’t make decisions like this on your own. Consult a financial advisor who can guide you through your options.
Use our easy locator tool to find an advisor who can help you with your wealth management needs.
Under $3 million in investible assets
For those with $3 million to $100 million or more in investible assets
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