Maximizing Your Wealth: Tax Planning Considerations for 2025 and Beyond

Paul: 00:00:00

Welcome to Insights. This is Paul Ellis, managing director of Ellis Wealth Management, where we encourage you to invest in what you love.

Ellis Wealth Management is an independent financial services firm focused on planning, advice, coaching and investment management. We are dedicated to the families we serve and we encourage you to invest in what you love.

Within Insights, we look at ways to make our world richer through focusing on sharing and developing human capital. Well, all right. What a great, great day it is in the beautiful Pacific North Northwest.

We are looking at spring coming around the corner and hopefully all these showers that we have are going to replenish lawns and flowers. And we've got some bright days ahead of us. We just changed the clocks. They're a little longer now for the daylight.

And, you know, I personally like that. I am so pleased to have with us today Jim Bergeron and Graham Foltz of Nuveen. And we're starting again our series on advanced planning.

Gentlemen, so glad to have you today.

Jim Bergeron: 00:01:33

Paul, how are you today? It's great to talk with you again. You mentioned a little bit about spring.

I am sitting here in Minneapolis today and it is March, and so for us, spring is a mere five months away. So that is part of our process. But it actually is really nice to be back with you and I'm looking forward to today's conversation.

Paul: 00:01:55

Oh, so pleased. So pleased. And then, Graham, you're in Denver, are you not?

Graham Foltz: 00:02:02

I am, Paul. Yep.

Paul: 00:02:04

How are we looking there?

Graham Foltz: 00:02:04

Denver, it is 65 and sunny and not a cloud in the sky. So we're, we're basically there over here.

Paul: 00:02:11

Oh, that's beautiful. Well, listen, we started off the series in the first month. We reminded families of our previous series.

We talked about laying the groundwork in estate planning.

We had a great conversation, conversation with Philip Nathaniel Friedman regarding musical digital assets and the need for estate planning regarding digital assets. Then the following month, we talked about trusts and what a trust is. Different ranges for trusts, the different types of trusts.

We talked about the general tax aspects, revocable versus irrevocable. And then we even talked about rats and a few other types of trusts.

Today we really wanted to talk about was family planning and preparation for families between 10 to 25 million. And it doesn't take long to get there. When you're looking at a business, you're looking at a house.

If you've got additional property, it doesn't take long for things to add up.

Jim Bergeron: 00:03:19

Yeah, Paul, I think, you know, we, we've talked a little bit about some of these issues in the past, but maybe just a Quick recap is we're going to go in a slightly different direction in some of our previous sessions, which I would encourage everyone to go back and listen to great information from a couple of different venues around this whole notion of wealth and, and the fact that wealth for many of us is defined by more than just our, our economic or financial resources. And it includes things like value and it includes things that are important to us as a family.

Paul, you mentioned the fact that each family could probably talk about some things that they have been encouraged by and some challenges that they've had for us and our family. The idea of cancer is an incredibly important component of who we are because we feel like we've been touched by cancer more than our fair share.

But as a part of that, we tease the idea of getting into a little bit more in the way of advanced planning. And the directional shift today is to focus a bit more attention around the tax aspects.

While we know that wealth is more than the financial aspects and estate planning is more than just estate tax planning, estate taxes and those transfer taxes that happen either during lifetime by way of gifts or through the estate at death, taxes are a component of that and we need to be cognizant of that and we need to be thinking about it. So today we're going to talk a little bit about some of that tax related conversation when it comes to transferring wealth.

And Paul, I'm curious about your thoughts, but to me we probably ought to start that conversation on the legislative front, given where we are now and what we're likely to see through the course of this year. What do you think?

Paul: 00:05:13

I think that's perfect.

Jim Bergeron: 00:05:15

So if we do start with that legislative background, let's provide just a quick recap on the estate tax and gift tax structure itself.

Now, different from the income tax transfer taxes, primarily defined as either an estate tax or a gift tax, there is a generation skipping tax as well. I'm not going to delve into that as deeply today. But for estate and gift taxes, it's a tax based upon the value of what you transfer.

If you do it during your lifetime, it might be considered a gift and a gift tax might apply. Now that gift tax kicks in after you pass what is referred to as a de minimis amount on an annual basis.

Sometimes we refer to it as an annual exclusion, but you can give away each year to anyone that you desire up to $19,000. And that number does get indexed for inflation each year. So what's 19,000 this year may grow over the next number of years.

And as a part of that, it's for every individual that you transfer assets to during your lifetime that you make gifts to.

So If I've got three children, for instance, it's 19,000 times three that I can give away and not have to worry about filing a tax return and maybe being exposed to that transfer tax. Better news.

Part of that is if I'm married, I and my spouse can combine our gifts so that for those same three kids, we can give them essentially $36,000 a piece. And if those children are married with spouses, we can do the same for those spouses.

If there are grandkids, and you can see where this goes, it can start to ramp up rather quickly.

And the important aspect of that is that that amount is something that we can sometimes use strategically to control the growth in our estates that might be subject ultimately to. To an estate tax. Before I get into the estate tax, I'm going to just quickly pause there. Paul, anything you would want to add on the gift tax side?

Paul: 00:07:36

No, I think that sums things up.

Jim Bergeron: 00:07:38

And I think that also sets up and tees up the conversation around, okay, so if I don't transfer assets during my lifetime and at some point when I pass, there are assets that are available to be transferred to the next generation or generations, are they subject to a tax? We'll start at the federal level. They are, in fact, subject to a federal level estate tax.

The first part of that is that that tax is a tax based upon everything that you own and transfer at your death. So think of it this way.

Everything that you have in all of your brokerage accounts or with wealth management organizations, all of your cash, the death benefit of life insurance policies is included in that.

All of your tangible property sounds odd, but the fact is that there is a value on all of those things that we've got hanging in garages, for instance, or tools that people like me thought would be better to buy and build the thing rather than buying the thing, only to find out that we ended up buying both the tool and the thing. All of those things have value. When you add all of that up, that's subject to a tax at death.

Now, the values are important because there is an amount that you can exclude from paying a tax. It's an exemption amount, sometimes referred to as the estate tax exemption. At the federal level, that exemption amount right now is $13.99 million.

So a really high number.

And again, if you are married, both you and your spouse have that exemption amount, almost $14 million combined between two of you $28 million that can be passed. It's subject to tax.

But the way the math works, in that tax calculation, you get to exempt that first, in essence, 14 million as a single person or 28 as a married couple. Once you move beyond that now you're paying an actual federal estate tax, and those tax rates wrap up real quickly and get to 40%.

So it's a tax we want to plan for. But the beginning part of this discussion is that there is some hope there that you can exempt a certain amount of assets.

If you transfer some assets during your lifetime, you can use that annual exclusion to control growth.

Those are all really good things, but they're legislative in nature, meaning they're laws that were enacted and signed into law and can be changed at any point. And we should talk about some of those changes as well, don't you think, Paul?

Paul: 00:10:39

Yes.

Jim Bergeron: 00:10:39

All right, so let's talk a little bit about the legislative front right now.

e all reside here in March of: 2025

end of this year, the end of: 2025

st of: 2026

So it would move from about 14 to about 7 million. That's written into the law right now.

And the only way that doesn't happen is if House, Senate and White House all get together and agree that it's not going to happen. That said, it can be a conversation that on its own would be maybe challenging. But now throw into that mix a number of other things.

There are a number of other tax provisions impacting individual income taxes, for instance, that are also set to expire at the end of this year. And you may have heard during the campaign and now President Trump indicating a desire to permanently extend those expiring provisions.

Again, that will prove to be a bit challenging because in essence, if you were to take all of those expiring provisions and just extend Them over the course of a 10 year period, that's about a $6 trillion hit to the budget.

Now, the way tax policy is passed into law is through a process that essentially allows for that legislation to be passed through the Senate with a simple majority rather than a 60 vote majority. But one of the rules is that that legislation has to have a neutral impact on the federal budget and deficit levels 10 years out.

And so as a result, that $6 trillion cost would be in addition to what is already a fairly imposing deficit and debt load. And so as a result, there would have to be some offsets. Well, that's a negotiation process.

So the key takeaway here is that if you're transferring assets either during your life or at death, if it's during your life, you have this annual exclusion amount that you can take advantage of. If you go beyond that amount, you start to dip into that exemption amount that I spoke of.

The lie as written right now has that exemption being cut in about half this year. So the question does become one of how do we plan for that? What are the things that we should be doing? I'm going to pause there.

Paul, you and I have had these conversations in the past as well. What do you think? What are some things that you've been talking about as well with others when it comes to the federal transfer tax?

Paul: 00:14:28

One of the conversations my clients and I have had is around the need for the government to fund itself and its obligations. And as you so aptly pointed out, at 36 trillion in debt, the government is not so likely to turn a blind eye to leaving 6 trillion on the table.

Jim Bergeron: 00:14:51

Yeah, and I think logistically, Paul, it's going to be difficult to do that, to pass legislation without the ability to offset some of those increases in costs.

And believe it or not, extending a provision with a higher elevated estate exemption amount, with lower income tax rates, that adds to the cost structure. And so to your point, it's difficult to do that without looking for and finding maybe some offsets within that.

Paul: 00:15:29

It's also difficult for families to in that as parents, you want to set your children up to be as successful as possible. You want your ceiling, as Michael Irvin of the Dallas Cowboys once said, you want your ceiling to be their floor.

And so the more that you can pass on to your heirs without having a deduction from the government or from the state, the better off those children are. The price of everything is going up.

So what is needed to help launch them and to sustain them or to at least assist them is much higher than what we've had in the past.

Jim Bergeron: 00:16:17

And to that point, Paul, again, critical aspect of this is to make sure that we are continuously focusing on the planning opportunities and strategies that we have available to us. We don't know what will ultimately happen with tax legislation, for instance, but we do know what we have available to us right now.

And taking advantage of that in some cases makes sense. Now, every family situation is going to be a little bit different. Your levels of financial and economic wealth will differ.

All of that needs to be accounted for in a planning process. And the planning documents that you put in place.

I heard one individual, for instance, suggest that given some of the changes that we might see at the federal level when it comes to transfer taxes, that is Estate and gift taxes, maybe we should just wait and not do anything when it comes to estate tax planning or document planning. And I think that that may be dangerous for a few different reasons.

And so as a result, we probably want to spend some time talking about how do we make sure that we're taking advantage of what we do have available to us.

And as a part of that, recognizing up to this point in today's conversation, we focused at the federal level, there may very well be a state level of transfer tax that we should also be cognizant of. Isn't that right, Paul?

Paul: 00:17:50

That is correct.

Jim Bergeron: 00:17:51

And if we think about that real quickly, again, just to put some numbers to it, just given where, Paul, where you reside and where maybe some of your clients reside, in Washington state, for instance, there is a state level estate tax. There's also a state level exemption from that tax. And that exemption right now is about $2.2 million.

Once you cross that threshold and passing assets through your estate, the rates range all the way up to 20% on those transfers. So again, not insignificant. And you can tell from that exemption amount radically different than what the federal exemption is in Oregon.

If you happen to reside in the Oregon area, the exemption amount from the Oregon estate tax is just $1 million. And I say just a million dollars is still a lot of money, but a much lower threshold than Washington and a lot lower than the federal level.

If you reside in those states, you want to make sure that your documents do incorporate and contemplate both the federal and the estate tax discussion. Now, a perfect example.

Many wills, for instance, have been written such that at maybe one spouse's death, the first spouse to pass assets get divided into two tranches, a tranche for the surviving spouse and a tranche maybe that is designated for children, maybe ultimately grandchildren. Now One of the questions that we always then in turn get faced with is how do we divide up the assets between those two tranches?

How do we in turn divide that wealth level? Well, oftentimes it's done by way of formula, and sometimes those formulas are based upon the exemption amounts that are available.

Now, oddly enough, I've seen a fair number of wills, Paul, where that division at that first spouse's death is based upon a formula that contemplates the federal exemption amount.

In other words, if I'm married at my death, divide up these assets between these two tranches by way of the federal exemption amount, and that federal exemption amount gets passed into, for instance, that tranche for my kids and grandkids, and. And the remaining amount passes to my spouse. Why would I say that, given that high level of exemption right now?

Because for many of us, we maybe have drafted wills 10 years ago, 15 years ago, maybe 20 years ago, and at the time, that was the appropriate funding provision or division formula. But right now, you could see where that could pose a potential issue.

For instance, let's assume that you do have a fairly significant amount of assets.

Maybe at my death, If I've got $25 million at my death, 14 million of that, my federal exemption amount, if I had this type of funding formula, would pass to a tranche. And I'm using that word, tranche, meaning that it could be outright or it could be in trust for the benefit of my kids and.

Or grandkids, and then the remaining amount passes to my surviving spouse. Okay, maybe that works.

But if I reside in the state of Oregon, for instance, that funding provision at my death, initially that $14 million, when I subtract the $1 million Oregon exemption amount from that transfer, I'm now exposed to $13 million that's subject to tax at the state level in Oregon, similar to Washington.

So the time to be reviewing documents, identifying even potential issues like this, and then setting the stage for what we very well could see in terms of tax legislation this year is absolutely critical. It's not the time to be sitting on our hands when it comes to estate planning.

Paul: 00:22:16

And no doubt states like Washington and Oregon are also looking for more money. So the probability of those exemption rates coming down, meaning going from 2 million to 1 million in Washington, that is not off the table.

Jim Bergeron: 00:22:36

Yeah, yeah. And I would say the same thing in my own home state of Minnesota. We are now projecting four years out to have a really significant budget deficit.

And so Minnesota is one of those few. There are 13 jurisdictions that have their own state level tax, Minnesota is one of them.

And so as a result, being cognizant of that, being cognizant of the fact that we are likely going to be seeing some budget shortfalls. And so what does that mean for the estate tax?

Well, it's probably more likely that it goes up than it goes down and probably even more likely than that that it remains in existence as opposed to being voted out of existence.

Paul: 00:23:22

Yes, that makes sense.

Jim Bergeron: 00:23:24

Well, Paul, maybe one of the things we should talk about now is so we've laid this backdrop that when it comes to transfer taxes at the federal level, there's a fairly significant exemption from those taxes available right now and it may be going down at the end of this year.

Now, that said, I would be remiss in saying that it is actually right now one of the Trump proposals and GOP proposals to permanently extend that higher level estate tax exemption amount. And so at least there is emphasis on keeping those higher level of exemptions available. But this is going to be a negotiation.

And that negotiation process is going to include a number of different taxes overall. And so as a result, once you get through that process, which is right now going on in D.C.

and will happen over the next few months, once you get through that process, certain things may fall out of it.

And the estate tax at the federal level, that gift and estate tax is one of those to me, that optically is a bit more difficult to be supportive of if you are also a representative that may be facing reelection in now less than two years, midterm elections. And so being cognizant of that, we have to be planful and mindful of how we put those documents in place.

And in some cases, if your wealth level, when you add up all of those financial assets is maybe around that $10 million.

Now remember everything, if you own a life insurance policy directly, that death benefit gets included in, in this accumulation of all of that wealth value. But when you add all of that up fits at or around 10 million and above.

We may want to think about and maybe Paul, talk about a couple of things to in turn take advantage of what we do have available right now.

Paul: 00:25:31

Yeah. So let's talk about that.

Jim Bergeron: 00:25:33

One of the things that we'll talk with clients sometimes in that net worth range is about the opportunity to maybe utilize some of that high level of exemption right now. And as you heard me talk about before, that exemption amount today is at $14 million. Now, if I'm married, that's 28 between the two of us.

If we find ourselves in that range of maybe 10 to 25 million dollars, it might make sense to take some of those assets off of the table from that estate tax calculation. Now, how do I do that? I do that by making a gift during my lifetime, and I can use some of that exemption.

Let's say that I go beyond my annual exclusion amount of $19,000, but I want to take more of that wealth off the table. I can do that during my lifetime by way of a gift, and I can use some of that exemption that's available right now.

Now, at some point, if that exemption level goes down in the future like it's currently slated to do, or if it changes by way of legislation, if I've already made the transfer and use that exemption, those assets are removed from that calculation and the federal government cannot come back in and say, well, we've reduced the exemption amount, so now we're going to tax those assets that you've transferred. So I get to take advantage of that exemption amount. They're effectively range of 10 to 25.

Paul, we should probably talk a little bit about, you know, what are some of the different opportunities that we might want to be thinking about in that transfer?

Paul: 00:27:15

Yeah, they're effectively grandfathered in at that point.

Jim Bergeron: 00:27:19

You're exactly right.

All right, so if we think about that structure we just talked about maybe taking advantage of some of that lifetime transfer, and we can make those transfers to our heirs, children, grandchildren. We can do it outright or we can do it in trust.

Oftentimes with that level of transfers, families will contain those assets in some type of a trust structure, and that trust structure will allow some degree of control and insulation of those assets.

So if I'm transferring assets to a child, for instance, I may not want to give them multiple millions of dollars right now, I can do that inside of a trust, and they can get disbursements from that trust on a regular basis, annual, or at certain ages, or for certain needs overall. But a trust is a great way of controlling those assets and also affording some insulation.

Assets that are held in a trust oftentimes are exempt from creditors, should that child, for instance, get into trouble, or we know the divorce rate. And so as a result, assets held within a trust for the benefit of a child can be to some degree insulated, if that were the case.

But I think the key here that we'll want to focus on is how do I take advantage of that exemption amount that's out there and available? From our standpoint, if you were that maybe 10 to 25 million dollars range.

When you add up all of those assets, we might want to take advantage of that exemption amount, but we would do it maybe for one spouse first, so not making an equal gift from both spouses if they were married, but using one spouse's exemption first. And the reason for that is because we might want to take advantage of some of that exemption that is out there and available right now.

And even if it does go down, as Paul indicated, we'd be grandfathered in.

It's more effective to do that with one spouse initially making that gift, using one spouse's exemption first, and then once that amount is used, maybe moving on to the second spouse. Paul, does that make sense?

Paul: 00:29:35

Perfectly good sense.

Jim Bergeron: 00:29:37

Now, the other part of that is that there are certain types of trust vehicles that will allow us to not only maybe contain some of those assets, but also provide some access. Now, every state and every individual circumstance is going to differ.

So I'll re emphasize the fact that, that neither Paul or I are providing tax or legal advice here, and we are precluded by law from doing that.

So what we might suggest you consider is exactly that, a consideration that you in turn might want to in turn speak with your own estate and tax professionals about. But one example, for instance, of a type of trust is something called a spousal access trust.

It's a type of trust that I in turn, can transfer assets to using some of my exemption amount, depending upon the level at which we transfer those assets. And if I'm married, my spouse would have the ability to access those assets should there be a need.

And the reason why we might want to think about this is that we can make the transfer, get the benefit of using some of that exemption amount available to us today, but also have the ability to access some of those assets should I and my spouse need them. Psychologically, it may be a little bit more beneficial, and especially if we're talking about larger transfers.

That idea of a spousal access trust is one example of the types of trust vehicles that allow us to, in turn, take advantage of the planning opportunities, but to do so in a way in which it's comfortable for you as that individual client.

Paul: 00:31:21

Now, can there be two spousal access trusts?

Jim Bergeron: 00:31:24

That's a great question, Paul, and in fact, we have seen that done. But I will suggest that there is some risk associated with that.

There are certain concepts that the IRS might look at that would, to some degree, start to group transactions together.

And there's a reciprocal doctrine also that the IRS could look at, meaning that if I set up one of these trusts and my spouse does it at the very same time time the IRS could very well argue that those two things are essentially part of one reciprocal transaction. And so as a result maybe deny the use of that exemption amount, subjecting those assets to a potential tax down the road.

I think there are some risk associated with that. And again, all the more reason why.

Why we strongly, strongly discuss the fact that if this is something of interest to you as an individual, you need to have that conversation with your own estate and tax attorney and professional to provide you actually that legal guidance. So Paul, to answer your question, it can be done, but you want to be careful in doing that.

And that's where that attorney will really help in that process, should it make sense in that situation.

Paul: 00:32:45

Because something theoretically can be done does not necessarily mean it's a wise decision is what I hear you saying.

Jim Bergeron: 00:32:54

Yeah, there is an adage out there. What is it? It goes something like the eat my cake and have it too.

And so there is a point in time in which you just want to contemplate how aggressive do I really truly want to get in order to minimize these taxes. And that's a whole range. And for some, where they fall in that range is radically different than others.

Again, that's that tax professional and legal professional's role is to help define where you're at in that mitigation range.

Paul: 00:33:26

So next steps for families that are looking at tallying up their assets, that threshold can add up quickly. What are some of your suggestions for families that may be in that bracket to sit down and start thinking through this?

Jim Bergeron: 00:33:42

Well, I think you hit the nail on the head with one of the things you just suggested.

And I think that every family should go through and do a fairly rudimentary but honest depiction of what do you have in wealth level right now when you add up all of those things, as I said before, cash, stocks, bonds, residences, life insurance policies that you own, all of your tangible assets, automobiles. And like, when you add all of that stuff up, what is that wealth level?

And if you're starting to get to that point where you're at or above that state level exemption and approaching maybe some of those federal exemption levels, the very next thing you should do is to meet with your estate planning and tax professional and go through a discussion around what makes sense. For me right now, I think you start with the value based piece.

Another indicator, Paul, to me as to next step is if your wills and or trusts are more than five years old. I think it's Time to have them reviewed again. In light of what we're seeing right now in D.C.

when it comes to tax legislation, it makes sense to make sure that those documents are still consistent with your desires. Part of that, Paul, as you and I have been talking about here, part of that is tax driven, but part of it also is circumstance driven.

What I mean by that, things happen, life events unfold.

And in a five year period, it might be that you've seen births, deaths, marriages, divorces, changes in your family structure, maybe changes in your desire about how assets are divided up amongst your heirs.

And as a part of that, reviewing those documents gives us a chance to make sure that they're up to date, that they're consistent with the needs that you want fulfilled right now, and that they're addressing the potential for some of these changes that we might be seeing coming down the path. Does that make sense to you, Paul?

Paul: 00:35:59

It does. And one of the springboards for some families may be elder care looking at assisting their parents.

It could be a good opportunity after taking care of the parent also then beginning to take a look at their own as well. So it could be a very busy year.

Jim Bergeron: 00:36:17

Yeah.

And again, all the more reason, Paul, for us to be making sure that our clients, the people that we're speaking with, understand it's not the time to sit on your hands when it comes to estate and wealth transfer discussions. At very minimum, review what you have in place and if it fits the bill, great peace of mind comes with that.

But very often we see there being a very real reason to address a change to those documents or a change in strategy, maybe taking advantage of that annual exclusion. I may not be at a wealth level yet where I really have to worry about that federal or even state level estate tax or transfer tax.

But as I continue to grow in wealth levels, I can control that growth by making use of that annual exclusion, making use of that 19,000, for instance. And again, we can do that outright to individuals or we can do it in trust. There are a lot of options that are out there.

Paul: 00:37:23

I've got a quick question for executives and business owners that have deferred compensation or key man insurance that is held at the company level. How is that generally factored into one's estate?

Jim Bergeron: 00:37:42

Yeah, great, great point, Paul. And I think part of what we also recognize is the fact that as a business owner, you have some unique needs.

Not just for instance, the idea of estate taxes themselves, but the business itself and balancing the interests of the business with the family, with the interests of maybe MITIGATING taxes means that we have to take all of these things into account. For instance, in your example, one of those things that we quite often see is an insurance policy put in place for a key individual in the business.

Now, I think that is a tremendously valuable thing to have in place. Place.

So at the end of the day, if you lose that key individual unexpectedly and they're integral to the operation of that business, it's going to have an impact not only on the operations, but the value of that business. So we have it in place to cover off that potential eventuality. And as a part of that, it provides value to the organization.

Well, that value can increase the overall value of the entity itself, thereby impacting this estate tax conversation. We can see some of that also impacting valuations.

When you've got some deferred compensation coming out of the organization to the individual, that may very well grow the wealth level. These things need to be factored in.

And for business owners, there is a parallel path of conversations that need to happen with the family estate plan, and that includes the business and the business succession plan. Everything from its current tax efficiency to identifying, for instance, are there individuals that are key and integral to this business?

And have we covered off that potential issue that we could be faced with if something were untoward to happen, if they were to meet with an accident, how do we cover off that potentiality? Well, that's all a part of that parallel planning process.

And it compounds even further and the urgency around it compounds even more if there is a succession event contemplated in that business's future, a sale of the business, an injection event, maybe of capital, or a transfer to children, if that's something that is on the horizon for the next two years or so or within that time period. Again, you need to have that business succession discussion along with your own family wealth succession conversation.

And the documents should contemplate both sides of that coin.

We see it all the time, Paul, but at the end of the day, it's those issues that are left unaddressed that sometimes pose the potential pitfalls and can blow up family relationships. Yeah.

Paul: 00:40:46

So these items should be discussed as well with the attorney that you're the tax attorney that you are speaking with, Correct? Well, it's a new year, it's a new administration, and there are new tax planning considerations to be had and to be discussed. There's more to do.

We've got a lot more to do in front of us this year. It's an exciting time.

Jim Bergeron: 00:41:09

Paul, I agree with you. At the end of the day.

I mean, this is one of those time periods in which there are tremendous opportunities out there to take advantage of and for those that have that information that in turn act upon it, be so much the better off rather than trying to scramble to catch up at some point in the future. I agree with you horribly, Paul.

Paul: 00:41:30

You know, Jim, one of the things that's very interesting is that if a person has a factory or a number of car dealerships or some additional businesses, they can quickly see that they may be in within that threshold of that 10 to 25 million. However, one of the interesting components about the American psyche is that we see ourselves as a middle class populace.

So whether or not someone is making a lot of money or ultra high net worth money or stable money, the psyche of the American citizen by and large is that we see ourselves as middle class.

The benefit to that is that we recognize that we can go up the ladder and we can go down the ladder and we generally look at our fellow man, our fellow citizen, as equals. They may have more at some point in time, but we don't think of ourselves as less than because of what they've accumulated.

On the other side of that mindset is that sometimes we undervalue our holdings and a home, and a vacation home, a couple of cars, and before you know it, you are in a new tax bracket that you really didn't consider. And one of the things that you highlighted is that there really is a double. I'm going to use the word whammy.

There can be a double whammy with the state level tax and the federal level. And the federal level looks like the big hammer, when in reality that big, big hammer might be the state level because it starts so much lower.

Does that make sense?

Jim Bergeron: 00:43:31

It absolutely does, Paul.

Paul: 00:43:33

Nuveen is working with Ellis Wealth Management for this podcast, but there are some components that Nuveen wants to make sure that everyone understands. Would you be willing to share that again?

Jim Bergeron: 00:43:44

Sure, we'll do so here.

This material is not intended to be a recommendation or investment advice, and it doesn't constitute a solicitation to buy, sell or hold a security or an investment strategy and is not provided in a fiduciary capacity.

The information provided does not take into account specifics or objectives or circumstances of any particular individual or family, or suggest any specific course of action. Investment decisions should be made based on your individual objectives and circumstances and in consultation with your advisors.

The views and opinions expressed here are for informational and educational purposes only as of the date of the production and may change without notice at any time based upon numerous factors such as market or other conditions, additional risks and uncertainties may not come to pass. And so as a result, you have to consider these as informational discussions directly. Nuveen does not provide legal or tax based information.

Nuveen provides investment advisory solutions through its investment specialists.

Paul: 00:44:59

Well, Jim, it is great to speak with you again, and I look forward to speaking with you again soon.

And I want to encourage everyone to take the time, take inventory, schedule an appointment to go over these items because they're not going to go away. They're better off to take care of things now.

And as always, we want to encourage everyone to invest in what you love!