There are useful estate planning vehicles that take advantage of current historically high federal exemptions, while providing flexibility to adapt and modify those plans based upon future events or tax law changes.
The Treasury Department is on the cusp of changing a taxpayer-friendly regulation regarding federal estate taxes, but there’s no need to panic. As long as taxpayers can show that their gifts are truly gifts, they should not be affected by the revision.
Once more hesitant to plan ahead, clients in today’s environment are much more proactive and willing to take action in the near term, rather than waiting and risking having to pay higher taxes down the line.
In terms of federal tax law changes, the last year had much ado but little change.
There are many ways to pass property on to children, including gifting the family home to them while you are still alive, bequeathing it to the children upon your passing, or selling the residence to your heirs.
If you have a parent over the age of, say, 65, thoughts about their future may have started to creep into your mind. However, because end-of-life planning can be emotional and overwhelming, it’s tempting to put these conversations off—and even more pleasing to avoid them altogether.
If you have not already been inundated with invitations to webinars, articles and newsletters regarding the estate planning you should consider doing before new legislation passes, you undoubtedly will receive these over the next few months.
Children may have moved away or lost touch. Old contacts may have died or become disabled. You cannot trust everyone and criminal cases based on misuse of a power of attorney do exist.
President Biden’s proposal to eliminate the step-up for calculating inheritance taxes targets a tactic that has long been a wealth-preservation tool. What are some of the ramifications of the proposal and what, after political wrangling, could be the tax implications for large inherited assets?
Facing down an uncertain election outcome and the possibility of tax reform in 2021, many families started transferring substantial amounts of wealth last year, making large gifts to take advantage of the historically high gift and generation-skipping transfer tax exemptions.
