ANGEL INVESTING AND ESTATE PLANS
Oct. 18, 2016
Angel investors in California may use estate planning in order to maximize the returns that both they and their families can enjoy. By using trusts, angel investors may take the value of the assets out of their estates so that they can protect them from creditors and divorces while making certain that they are preserved for others.
An angel investor who has stock in a promising startup company might want to consider gifting the shares to a trust while the stock is still low in value. By doing so, the investor's family may later enjoy the benefit of the increase in value while the investor has been able to take it out of the estate's overall value. This can help the investors to effectively have more of their $5.45 million federal estate tax exemption amount remaining.
Trusts may also be set up in ways that encourage prudent use of the assets. For example, a grantor may earmark funds for home purchases, college or other similar uses. It is important for angel investors to carefully document all of their investments including their values. This may help save time and money for their families later when they are attempting to track the investments down.
When people have accumulated substantial assets, careful estate planning may help them to minimize the estate taxes that the estate might otherwise have to pay. People might want to consult with estate planning attorneys about trusts that they can use to minimize taxes and avoid a lengthy and public probate process while also helping to pass their assets in a smooth and expeditious manner.