Coordinated Counsel
Failing to Plan for Tax
Transcript
BARRY: So number one was failing to plan for tax.
CHAD: What kind of tax are you talking about, Barry?
BARRY: There are a lot of kinds of taxes.
CHAD: Lots of taxes.
BARRY: It really burdens everybody. In my world, it’s estate tax, gift tax, generation-skipping transfer tax, and believe it or not, income tax. Income tax is a big part of estate planning that people commonly misunderstand and disregard.
CHAD: Can you tell us –? How could income tax be related to estate planning? Most times with estate planning, the individual has passed away. How does income tax play into the planning that you do?
BARRY: Great question. I’m glad you asked. There’s two ways. Number one, estate planning is not just about what happens when you pass away. It’s also about what happens during your life. While you’re living and paying taxes. There’s cases where you may want to shift the tax burden to someone else who has a lower tax bracket during life. There’s gift tax consequences of doing that during life, but there are also income tax benefits.
After you pass away, there’s still income tax on assets. So if you give something to someone and they sell it, there may be very different income tax consequences than you anticipated. People are only thinking about estate tax, but that’s wrong. Income tax planning has been at the forefront of planner-practitioners’ minds since the exemption increased to over $11 million per spouse. Getting into that discussion is really more talking about basis, which I’d like to reserve for a standalone video.
CHAD: Okay, we’ll leave you that right to reserve it.
BARRY: With your permission. We will reserve that for a standalone video as part of our long list.
CHAD: How about a brief summary of what basis is, just for general understanding purposes?
BARRY:
So basis is kind of like what you paid for an asset, plus any modifications to it. And that’s either inherited, gifted to someone during life, or it’s adjusted if it’s transferred at death. In either case, when it’s sold by a beneficiary, there’s a tax consequence. And you can do very positive things for your family with a little bit of thought and planning.
CHAD: All right, that’s a perfect, succinct answer right there.
BARRY: Lots of practice. So taxes are something to think about in every single plan. Even if you don’t think you have an estate or a big estate, you do have tax consequences, so pay attention to it. Number two —
CHAD: Are you grouping capital gains tax into that category as well? I assume that’s what you’re referring to with selling assets.
BARRY: It’s not necessarily what I’m referring to at all, but yes, it’s part of income tax. Yes, absolutely. Because there could be more or less tax, and then what you’re talking about is the character of tax. The character of tax will affect the amount of tax. So, yes.
Why “Who Gets What” Isn’t Enough: The Overlooked Power of Tax-Aware Estate Planning
By: Barry E. Haimo, Esq.
April 9, 2026
When most people think about estate planning, they focus on one question: Who gets what?
But that’s only part of the story. A well-crafted estate plan doesn’t just direct assets; it considers what those assets are worth after taxes. And that difference can be significant.
The Hidden Risk: Leaving Behind a Tax Burden
Two assets with the same dollar value can have very different outcomes for your beneficiaries.
For example:
- A brokerage account may come with favorable tax treatment when inherited
- A retirement account may be fully taxable upon withdrawal
- A gifted asset may carry built-in capital gains that the recipient inherits
Without proper planning, your beneficiaries could unknowingly receive assets that trigger higher tax bills than expected.
Asset Location Matters More Than You Think
Not all assets should be treated equally in your estate plan.
Strategic planning can help ensure:
- Tax-efficient assets go to individuals
- Tax-heavy assets are directed where they’ll have the least impact
- Charitable giving is structured to reduce overall tax exposure
This isn’t about changing your intentions, but making sure those intentions deliver the greatest possible benefit.
Timing Can Change Everything
When and how assets are transferred can also influence the tax outcome.
Decisions made during your lifetime (such as gifting strategies or ownership structures) can shift tax burdens in ways that benefit your family. But without coordination, those same decisions can backfire.
The Real Goal: Preserve What You’ve Built
Estate planning isn’t just about distributing wealth. It’s about preserving it. That requires looking beyond documents and into the financial reality your loved ones will face.
Because at the end of the day, it’s not just about what you leave behind. It’s about what they actually get to keep. Let us help ensure your legacy.
And if you’re interested in getting all of your advisors on the same page, get in touch with Kinnect Financial.
