Bill and Hillary Clinton were once again in the news for their financial maneuverings. This was not a revisit of Whitewater or a review of Hillary's book deal. This time, it was because they took steps to significantly reduce their estate taxes.
Both Bill and Hillary have been vocal supporters of the estate tax in the past. In fact, in 2000, President Clinton vetoed a proposal to repeal the estate tax. That doesn't mean either of them want to pay it.
Instead, Bill and Hillary used an advanced estate planning technique known as a qualified personal residence trust or "QPRT" for short. A QPRT is an irrevocable trust that is used to remove the value of your home from your taxable estate. According to reports, the Clintons created two trusts and moved their homes valued at $1.8 million dollars and $5 million dollars, respectively, into their trusts. By doing so, they have removed the value of those homes from their estate for estate tax purposes. With a current federal tax rate of 40%, they may have saved themselves as much as $2,720,000.
I will let the political commentators pontificate on the Clintons planning around a tax privately that they continue to champion publicly.
A QPRT is an advanced estate planning technique that can significantly reduce state and federal estate taxes. To learn more about a QPRT and whether or not it may be a good fit for your overall estate plan, click here.
