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Harsco Insights: Mastering Legacy Transfers with Tax-Savvy Strategies

Harsco employees who prioritize tax-efficient wealth transfer strategies, such as irrevocable trusts, below-market loans, and life insurance, can help ensure their legacy is passed on with minimal tax exposure, but it requires careful planning and adherence to IRS guidelines.' – Kevin Landis, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Harsco employees looking to optimize their estate planning should consider leveraging strategies like direct tuition payments, family LLCs, and life insurance to preserve wealth while minimizing tax implications, but these strategies require meticulous execution to comply with tax regulations.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

Trusts and Estate Planning: How irrevocable trusts and structured financial transfers can help reduce estate taxes.
Tax-Advantaged Gifting Strategies: Using below-market loans, direct tuition and medical payments, and innovative real estate approaches to legally transfer wealth.
Integrating Family into Financial Planning: Exploring business integration, authorized credit card use, and life insurance as tools for legacy preservation.

Managing complex tax laws to optimize financial gifts to children is a challenging task in asset management. Some very affluent people want to leave as much as possible to the next generation without paying the 40% postmortem estate tax on assets over USD 13.99 million, which is levied on Harsco employees. The IRS caps annual gifts for individuals at USD 19,000 to offset those tax consequences. If this sum is exceeded, the giver is drawing from their USD 13.99 million lifetime exemption and must file Form 709.

Trust Funds: Transferring Strategic Assets

As an important tool in estate planning, trusts allow the transfer of money within set limits. And for Harsco professionals, implementing a trust might mean establishing annual spending limits or age limits at which funds may be distributed via a spendthrift or age-terminating clause. Only an irrevocable trust can remove assets from an estate and limit estate taxes, says Kitty Ritchie of Drucker Wealth, so long as the trust contents do not exceed the lifetime exemption threshold.

Below-Market Loans: A Helpful Tax Option

Gift taxes may be reduced by structuring financial support as a loan when parents help with big purchases like real estate. Some Harsco team members have found that structuring these loans - with a promissory note and interest at the applicable federal rate - usually lower than the commercial rates - can provide significant tax benefits. When these conditions fail to apply, the IRS could consider the loan a gift and tax it upon review.

Innovative Mortgage Options

A different approach involves a parent buying an apartment outright and then refinancing the loan with a home-equity line of credit (HELOC) - making the child the homeowner without a direct cash transfer - financial journalist Farnoosh Torabi writes.

Gift Tax Exemptions for Medical & Educational Payments.

This annual gift tax cap is not applicable to payments directly to medical or educational institutions on behalf of a child. Some Harsco staff have taken this exemption to pay tuition or healthcare directly. In fact, educational analyst Roxana Reid says in recent decades grandparents have begun covering private education tuition.

Pied-a-Terre: Alternative Residential Investments

The acquisition of a second home in which a child lives is effectively giving away its rental value. Without documentation and reporting, this method may be reclassified as a gift. Harsco employees considering such alternative investments should check with a tax professional about compliance.

Payments with Credit Cards

Covering expenses without directly gifting money is possible by designating a child as an authorized user on a credit card. But annual charges over USD 19,000 must still be recorded as gifts - and could be flagged during an IRS audit. Many Harsco employees have considered this strategy for their expense management.

Using Family Members in Business Integration.

Income may be transferred indirectly through family LLCs when family members are incorporated into business operations or real estate interests. Such arrangements must involve legitimate work relationships with the IRS, said Andrew Crowell of DA Davidson 1 and 1 Co. Harsco team members sometimes use such strategies to facilitate wealth transfer while remaining regulatory compliant.

Cash Presents Below Reporting Limit.

Peter Anastasian of Wealth Enhancement Group says although legally ambiguous, financial gifts under USD 10,000 are exempt from IRS reporting. Some Harsco professionals have used it legally.

In Conclusion

For those focused on preserving and passing on their financial legacy, following wealth transfer techniques that comply with gift and estate tax regulations is imperative. All strategies need planning, from trusts to new financing models. Harsco employees and other professionals can use these methods to help move wealth along.

Wealthy parents who are considering how to pass wealth are turning to life insurance coverage. Designating their children as beneficiaries allows parents to leave a substantial tax-free benefit upon their death. This avoids probate and avoids gift and estate taxes and is a useful strategy for wealth transfer. Life insurance proceeds generally are deductible from federal income taxes (2021), making it a practical and affordable way to leave a legacy. Perhaps Harsco employees will find life insurance strengthens their legacy strategy.

Examine efficient wealth transfer techniques to reduce estate and gift taxes. For more custom legacy planning, explore direct tuition payments, below-market loans, irrevocable trusts and real estate investments. Learn how to give to your family - tax efficiently - by using life insurance and involving children in business legally. Structure your financial legacy so beneficiaries can receive assets with low tax - an ideal strategy for those familiar with IRS requirements.

A professional gardener tending to a rare, valuable orchid is like navigating financial gifts. Parents use trusts, below-market loans and direct tuition payments much like the gardener uses precise watering, optimal sunlight and the right fertilizer to encourage the orchid's growth without overwhelming it. As such, they help children develop while addressing gift and estate tax issues. Harsco employees understand, like gardeners, that sound financial planning creates a legacy for future generations.

Articles you may find interesting:

Sourced

1. “ Irrevocable Trusts: What Beneficiaries Need to Know to Optimize Their Resources .” J.P. Morgan Private Bank , Dec. 2024, privatebank.jpmorgan.com. Accessed Apr. 2025.

2. United States Congress. “ 26 U.S. Code § 7872 - Treatment of Loans with Below-Market Interest Rates .” Legal Information Institute , Cornell Law School, current through 2025, law.cornell.edu. Accessed Apr. 2025.

3. Carter, Jean Gordon, and Toni Ann Kruse. “ Direct Payment of Medical Expenses and Tuition as an Exception to the Gift Tax .” American College of Trust and Estate Counsel (ACTEC) , 2023, actec.org. Accessed Apr. 2025.

4. “ Using Intra-Family Loans to Transfer Your Wealth .” City National Bank , 2024, cnb.com. Accessed Apr. 2025.

5. “ Irrevocable Life Insurance Trusts: An Effective Estate Tax Reduction Tool .” American Bar Association , Summer 2013, americanbar.org. Accessed Apr. 2025.

How does the Harsco Pension Scheme ensure that investment strategies align with the financial goals of its members, and what measures are in place to assess the adequacy of these strategies over time? Given the complexities involved in managing a pension scheme, understanding the decision-making processes and the criteria for evaluating fund performance is crucial for members to make informed retirement choices.

Investment Strategy Alignment: The Harsco Pension Scheme ensures that its investment strategies align with members' financial goals by regularly reviewing its Statement of Investment Principles (SIP) and adjusting strategies based on quarterly performance monitoring. The Trustees use tools such as LCP Visualise to track investment returns and funding levels, ensuring the Scheme is on track for full funding by 2025. This review process helps guarantee that the investment strategies are adequately meeting long-term goals and adapting to market conditions(Harsco Pension Scheme_3…).

In what ways does the Harsco Pension Scheme engage with its investment managers to ensure transparency and stewardship in voting on significant shareholder resolutions? Exploring how Harsco collaborates with these managers can shed light on the efficacy of decision-making and the importance of governance in the scheme's investment practices.

Engagement with Investment Managers: The Harsco Pension Scheme engages closely with its investment managers, delegating stewardship activities like voting on shareholder resolutions. These managers, such as BlackRock, follow rigorous voting and engagement policies, which are reviewed regularly. The Trustees ensure transparency by monitoring managers’ ESG integration and voting behaviors and by addressing significant issues, such as modern slavery or climate risks(Harsco Pension Scheme_3…).

What are the specific retirement benefits available to employees under the Harsco Pension Scheme, and how can members customize their retirement strategies to fit their individual needs? This question addresses the diversity of retirement options and the potential for tailoring plans to meet unique financial situations.

Retirement Benefits Customization: The Harsco Pension Scheme offers a range of retirement options, including default and self-select investment options that reflect member demographics and retirement preferences. Members can customize their retirement strategies through diversified funds, ensuring their investments are aligned with individual needs. The default strategy has been reviewed to ensure appropriateness for the majority, with options for drawdown, lump-sum withdrawals, or annuity purchases(Harsco Pension Scheme_3…).

How does the Harsco Pension Scheme handle the changing demographics of its membership, especially in terms of investment risk and available retirement options? Understanding how the scheme adapts to demographic trends can help employees anticipate changes that may affect their retirement savings and strategies.

Adapting to Demographic Changes: The Trustees monitor demographic trends and adapt the Scheme’s investment strategies accordingly. For example, as the Scheme matures, the investment allocation moves towards lower-risk assets to reflect the changing membership profile. Regular reviews ensure the Scheme adapts to the evolving needs of its members, helping to reduce risk while maintaining adequate returns(Harsco Pension Scheme_3…).

What is the process for Harsco employees to access their pension statements, and how frequently are these updates provided to ensure that members stay informed about their retirement savings progress? Regular communication about contributions and growth can significantly impact an employee's comfort level when planning for retirement.

Pension Statement Access: Harsco employees can access their pension statements through regular updates provided by the Trustees, typically on a quarterly basis. These statements, including detailed reports of contributions, investment growth, and progress toward retirement goals, help members stay informed and make adjustments as necessary(Harsco Pension Scheme_3…).

How does Harsco incorporate Environmental, Social, and Governance (ESG) considerations into its investment philosophy, and what impact do these principles have on the pension schemeâ€™s performance? A deeper examination into these aspects may enhance employee understanding of socially responsible investing trends within their pension fund.

ESG Considerations: The Harsco Pension Scheme integrates Environmental, Social, and Governance (ESG) principles into its investment strategy, regularly assessing its managers’ ESG practices. These assessments include human rights, climate change, and CEO pay ratios, ensuring that investments are socially responsible and aligned with long-term sustainability goals(Harsco Pension Scheme_3…).

What are the implications of the current IRS limits on contributions to retirement plans for employees participating in the Harsco Pension Scheme in 2024? Recognizing how these financial regulations impact personal contributions and matching funds can empower employees to maximize their retirement funding strategies.

IRS Limits Impact: The current IRS limits on contributions to retirement plans, such as those applicable in 2024, directly impact Harsco employees by capping how much they can contribute tax-free. Understanding these limits helps employees plan their contributions to maximize employer matching and ensure they take full advantage of their retirement benefits(Harsco Pension Scheme_3…).

With regards to the ongoing performance evaluations, what benchmarks does the Harsco Pension Scheme utilize to measure the success of its investments, and how are these benchmarks selected? This insight can help employees understand the performance metrics that drive the long-term viability of their pension scheme.

Benchmarking Investments: The Harsco Pension Scheme uses various benchmarks to assess the performance of its investments. These benchmarks are selected based on expected risk and return profiles and are reviewed quarterly. Monitoring against these benchmarks ensures that the Scheme’s strategies remain aligned with long-term funding goals and adapt to changing market conditions(Harsco Pension Scheme_3…).

How can Harsco employees obtain more information on the specific investment options available within the pension scheme, including the associated risks and potential returns? Access to comprehensive investment literature is essential for employees to make well-informed decisions regarding their pension scheme participation.

Investment Options and Information: Harsco employees can obtain detailed information about their pension’s investment options, including the associated risks and potential returns, through regular reports from the Trustees and investment consultants. This transparency allows employees to make informed decisions about their pension participation(Harsco Pension Scheme_3…).

What is the preferred method for employees to contact Harsco to gain further clarification on their questions about the pension scheme, and what resources are available for them during the retirement process? Clear communication channels and support mechanisms are vital as employees navigate their retirement preparations. These questions are designed to provoke thought and discussion around the operations, benefits, and governance of the Harsco Pension Scheme while providing employees with a foundation for understanding their retirement options.

Communication Channels: Employees can contact the Trustees of the Harsco Pension Scheme for clarification on pension-related questions through established communication channels. Resources, including personalized financial advice and regular meetings with investment managers, are available to assist employees during the retirement planning process(Harsco Pension Scheme_3…).