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THOMAS M. FARACE

Thomas Farace is an attorney, certified public accountant and Certified Financial Planner™ practitioner/professional.

He currently serves as Deputy Practice Group Leader of the Private Clients group and works out of the Rochester office. He also spends significant time in the DC and Metro NYC areas assisting individual clients with tax, estate and financial planning matters.

Prior to joining Nixon Peabody LLP in 1999, Thomas served twenty years as a CPA and tax partner in the multidisciplinary professional services firm of Arthur Andersen LLP, where he was head of its Tax Division in the Rochester office, in charge of private client services in the Stamford, Connecticut, office, and was an associate director of the Andersen Center for Family Business. He also held the position of designated person of Andersen Investment Advisory Services.

What do you focus on?

I focus on matters important to individuals, including tax, estate and financial planning. I have over 33 years of experience and concentrate my practice in three main areas.

Wealth Transfer & Estate Planning

I work with many individuals and their families to effectively transfer wealth to future generations through the use of family partnerships, dynasty trusts and special transactions. For example, I recently assisted a family with the transfer of a significant private business to an intentionally defective dynasty trust for the benefit of future generations, with minimal gift tax consequences. In addition to significant estate tax savings, the designed structure also provides a plan for business succession and governance.

Income Tax Planning & Compliance

Another portion of my practice involves income tax planning and tax return preparation for individuals, family partnerships and trusts. I have extensive experience helping U.S. citizens/residents and dual citizens by interacting with the IRS regarding their offshore account disclosures, FBAR filings, PFIC filings and FACTA compliance.

Financial Planning

The third component of my practice involves quantitative financial planning for individuals. I assist executives by developing strategies for stock option exercises and compile retirement cash flow schedules and analysis that provides a blueprint for meeting financial objectives.

What do you see on the horizon?

I have been following the not so subtle rise in interest rates along with the threat of the inevitable end of the federal “quantitative easing” program with great interest. Under any historical measure, we remain in a low interest rate environment, which provides a number of outstanding wealth transfer opportunities. Sales to intentionally defective trusts and grantor retained annuity trusts are two strategies that work well with low interest rates to optimally transfer wealth (whether family businesses or investment portfolios) to family members. At some point, interest rates will rise, at which point the current opportunities for leveraged transfers will lose effectiveness.

Media Clips

  • Be Smart at Year End; It's a challenging planning environment
    Rochester Business Journal | November 30, 2012

    Partner and Private Clients deputy practice group leader Tom Farace discusses year-end tax planning in this featured column.

  • Time to Review: Consider these strategies to save on taxes
    Rochester Business Journal | December 2, 2011

    This contributed article, authored by Rochester partner and deputy Private Clients practice group leader Tom Farace, discusses beneficial tax strategies for individuals to consider.

Ideas

Thomas M. Farace