The IRS has announced the applicable federal interest rates (Revenue Ruling 2016-4) for February 2016. The Section 7520 rate for February will remain at 2.2%. Other rates slightly increased or decreased, including the AFRs used for intra-family loans, sales to defective trusts and other planning techniques.

Implications

As we go to press with this Alert, individuals have at their disposal a full suite of planning techniques that are supported by applicable interest rates that Cyrano de Bergerac might describe as "infinitesimal." And with those interest rates remaining relatively steady, an individual could reasonably conclude that any interest rate-sensitive wealth transfer planning, which is pretty much all wealth transfer planning, can wait its turn among all the other things on his or her plate. That said, another individual could just as reasonably conclude that, for anyone interested in wealth transfer (or wealth retention, for that matter), the most important thing to keep an eye on is not the level of interest rates, it's the polls. Simply put, if the dominos fall in a certain order this November and any number of proposals we've written about over the past few years and/or the positions on estate tax exemptions and rates suggested by some become law, then today's bright outlook for wealth transfer planning could be a shadow of its former self a year from now.

Sure, there's plenty of time to move, right? And, interest rates aren't likely to move much, if at all, twixt now and then. And, who knows which way the wind will blow in November? And, by the way, today's markets are taking care of some of my estate tax problems! So, shouldn't we just wait and see? Maybe you can. But as a laser-focused James Bond said to his nemesis Goldfinger, "Can you afford to take that chance?"

Perhaps the best arbiter of these decisions is the individual who has actually done wealth transfer planning. For it's this individual who knows best all the time and materials that go into the making of a well-constructed, thoughtfully implemented plan. These savvy individuals know that wealth transfer planning, like buying straw hats, is best done in winter. That's now, both according to the weatherman and the pollsters.

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