"The UVTA presents serious problems for estate and tax planners. For those states that are considering passage of the UVTA, education is tantamount to understanding the underlying dangers of the UVTA. The statutory solutions present in this newsletter will help neutralize those dangers and allow estate planners and creditors' attorneys to co-exist peacefully within the UVTA realm.
The recent passage of the 2017 Tax Act (the "Tax Act") brought many changes for business and individual taxpayers. Many of the income tax changes have been highly publicized, such as the decrease of individual income tax rates, the reduction in the taxability of income from certain pass-through entities and the reduction of the state and local tax deduction.
This Alert focuses on the lesser publicized but no less significant impact of the Tax Act on divorce -- even though the changes do not take effect until 2019, the effects can be far reaching.
The President signed Public Law No. 115-97, formerly known as the Tax Cuts and Job Act, into law on December 22nd (hereinafter the "Act"). Among other sweeping changes, the Act doubles the base lifetime gift and estate tax exclusion and GST tax exemption of $5 million to $10 million, as indexed for inflation. For 2018, this translates to an exemption amount of roughly $11.2 million per person.
Beginning in 2026, the gift and estate tax exclusion and GST tax exemption return to their base amount of $5 million, as they would have been indexed for inflation. Thus, as enacted, the increase is temporary.
Following the Act's changes, it may be necessary to review your documents to avoid unintended results in the future and to best achieve your tax planning goals.
As of today, May 1, 2017, McArthur Franklin PLLC will be known as Franklin Karibjanian & Law PLLC, with George Karibjanian and Lester Law joining Richard Franklin as partners. The firm will continue the proud tradition started by Ginny McArthur more than 20 years ago of a boutique trusts and estates law firm located in the Nation's Capital. Our services will focus on tax and estate planning, trust and estate administration, business succession planning, trustee and beneficiary representation and asset protection planning.
By Richard S. Franklin
If Congress enacts H.R. 1 as currently written by either the House of Representatives or Senate, the gift and estate tax exclusion will double to $11,200,000 starting January 1, 2018. Residents of the District of Columbia and Maryland will have the benefit of higher estate tax exemptions in 2018.
By Richard S. Franklin
Congress is proposing modifications to the gift, estate and generation-skipping transfer taxes. The House of Representatives would double the estate tax exclusion to $11.2 million per person and repeal the estate tax beginning in 2025. The Senate would double the estate tax exclusion to $11.2 million per person but without repealing the tax. Under either approach, a married couple could protect $22.4 million from federal estate taxes. Increasing the exclusion amount reduces the percentage of families subject to the estate tax from .02% to .01%.
What should you do if one or more of these changes occur?
By Lester B. Law
-- January 2, 2018 Deadline to Cure "Past" Missed Portability Elections!
-- Two Years from Death of Death to Make Future Portability Elections!
Revenue Procedure 2017-34, issued on June 26, 2017, provides two new forms of administrative grace, one allowing all "past" missed portability elections to be fixed and one allowing "future" missed portability elections to be fixed. There are limits on this administrative grace, however.
The new IRS procedure allows every small estate where the portability election was missed since the date of enactment the opportunity to go back and make the election. We cannot stress enough this new procedure's importance.