Creating A Legacy By Focused Asset Protection

San Diego Estate Planning Law Firm

The first step to creating a legacy is to generate income. The second step is to preserve and grow that income. Attorney Rod Hatley understands the full scope of what it means to take a holistic approach to wealth and the steps and vision needed to create and protect abundant wealth.

What Is the Generation-Skipping Transfer Tax?

Also known by its acronym GSTT, this is a federal tax that was introduced in 1976. It is incurred whenever there is a large gift or transfer of property. It only happens if the recipient of the gift or property is 37.5 years younger than the person giving it.

This means it applies typically to grandparents who wish to give their grandchildren large gifts. The GSTT may make these donors vulnerable to significant tax penalties.

The flat rate is 40%. This means any asset or money over $11.7 million (2021 value) that is given to anyone 37.5 years or more younger than the donor will be assessed a 40% tax. If the estate is valued at $20.7 million, then $9 million (the amount that exceeds the allowable $11.7 million) will be taxed at 40%, which is $3.6 million in taxes.
This tax will be applied to anyone, family member or not, who receives a significant gift.
The transferor (person who gives the gift) must pay the tax.
There is an exception if the grandchildren’s parents have died; in that case, the grandparents can leave money to the grandchildren as if they were their children, without being assessed the GSTT.

There are ways to protect these assets. One option to avoid the GSTT is to use your $1 million GST exemption.

There Are Many Ways To Avoid The 40% GSTT

There are many ways to avoid paying the high tax rate that the GSTT incurs. But which path is best for you depends on two things: your financial situation and your goals. Here are some options that you may wish to consider with the guidance of your estate planning attorney:

Gifting property that is likely to increase in value.
Giving annual monetary gifts that avoid the gift tax.
Investing directly in your grandchild’s education.
Taking out a life insurance policy with your grandchild or grandchildren as the beneficiaries.
Creating a minor’s trust, irrevocable trust or Crummey trust

Rod Hatley can advise and work with you to find the best options for you and your family. The best step to take is to plan now.

Get Maximum Protection For Your Assets

Hatley Law Group APC was founded with the intent of helping parents leave a meaningful and lasting legacy for their children and grandchildren. Rod Hatley will work with you to make the most of the opportunity you have to create a lasting impact and tell your story for generations. Book a Call to find out more. You can also reach the firm by sending a contact email. Based in San Diego, Rod meets with clients all over California.

Client Success Stories

Rod gave me his undivided attention, reviewed the information I provided, and was able to advise me as to the steps necessary to administer my husband's SNT

"Before my husband's passing, we worked with another estate planning attorney. We put into place estate planning documents to supplement a special needs trust (SNT) that a paralegal had helped us establish for my husband's benefit following his diagnosis of a critical illness. After my husband died, I didn't feel that I was getting the assistance I needed to administer my husband's SNT, which was both frustrating and upsetting. I was very distraught when I sought a second opinion from Attorney Rodney J. ("Rod") Hatley, who was personally referred to me by another attorney with whom I was working. Rod gave me his undivided attention, reviewed the information I provided, and was able to advise me as to the steps necessary to administer my husband's SNT. I cannot say enough about Rod's integrity, empathy, and his ability to resolve difficult problems calmly and efficiently. Rod is "one in a million" and will always put the care and interests of his clients first so that no client's family has to go through the challenges of conservatorship or probate when a loved one becomes mentally disabled or passes without proper planning."

Deb E.

Rod was happy to review the trust I had set up before I met him

“Rod was happy to review the trust I had set up before I met him. He explained the pros and cons of how the trust documents were worded. I feel confident in following his advice and counsel. I also like the fact that he served in the military and comes highly recommend by a colleague.”

– Susan P.

I highly recommend him to anyone who needs a trust

“Rodney J. Hatley did a trust for my husband and I. It was done in the most unique way. He is very detailed in his work and leaves nothing for you to guess about. I highly recommend him to anyone who needs a trust.”

– Rosemarie P.

I have had the pleasure of working with Rod Hatley on a number of client cases

“I have had the pleasure of working with Rod Hatley on a number of client cases. In addition we co-presented several workshops for professionals over several years. I have always found that Rod places a high degree of emphasis on detail and accuracy. He works hard to make sure that clients get the outcomes they want. No stone is left unturned when you collaborate with Rod.”

– John J.

Working with Rod and team on my Living Trust was seamless

“Working with Rod and team on my Living Trust was seamless. They guided me through the process and all my questions were answered. They were professional and truly cared that I understood everything along the way. I was a bit overwhelmed with the process yet Rod was able to counsel me and we got the job done!”

– Tamara M.

The Hatley Law Group made it so easy and fast

“The Family Trust process was much easier than we anticipated. We have been procrastinating for years because it felt overwhelming. The Hatley Law Group made it so easy and fast. We highly recommend their services. Thank you for putting our minds at ease.”

– David R.

Rod REALLY knows his stuff!

“Rod REALLY knows his stuff! We tried Zoom legal and that was a FAIL! Rod set us straight and made us see and understand things that were truly important when planning our future! Thanks, Rod!”

– Julie B.

The team at Hatley Law Group did an amazing job crafting a plan that met our needs

“Estate planning can be a tedious and overwhelming experience. The team at Hatley Law Group did an amazing job crafting a plan that met our needs.”

– Shawn M.