The Federal gift and estate exclusion amount in 2023 stands at $12.92 million per person. A significant change is scheduled for January 1, 2026, when the gift and estate exclusion is set to be reduced by half. The estate planning implications of this impending change are broad and much discussed in existing literature. This Client Alert delves into the lesser-discussed implications of the upcoming change.
Transfer Tax Changes for 2023
Since 2011, the federal gift and estate tax exclusion amount (the “Exclusion Amount”) is subject to an annual inflationary increase. For 2023, the current economic inflationary spike is causing a significant increase in the Exclusion Amount, as well as other federal thresholds subject to annual inflationary adjustment.
Transfer Tax Changes for 2022
Even though there is no new estate tax legislation taking effect in 2022, there are increases to current estate, gift and generation skipping-transfer (GST) tax exemptions and exclusions, all of which are summarized in our latest Client Alert.
Proposed Changes to Income and Transfer Taxes – A Brief Summary of the Estate Planning Changes in the New $3.5 Trillion Infrastructure Proposal
In late August 2021, by a 220 – 212 party-line vote, the House of Representatives passed a $3.5 trillion
budget resolution,1 while also advancing the $1 trillion bipartisan infrastructure bill.
On September 13, 2021, House Ways & Means Committee Chairman Richard E. Neal (D-MA) released
the initial legislative text and a summary of the proposed “Build Back Better Act” (the “Proposal”). On
September 15, 2021, the Committee approved its sections of the Proposal that mostly addressed social issues and plans to pay for them with tax increases. The Proposal contains provisions that, presumably, seek to increase taxes on the higher income and high net worth taxpayers.
The focus of this Client Alert is on estate planning changes, which include increasing ordinary income
and capital gains tax rates for high income earners, lowering transfer tax exemptions, subjecting certain
irrevocable grantor trusts to the estate tax, and attempting to overhaul the “grantor trust” income tax rules.
Maryland’s New Elective Share Law is Effective as of October 1, 2020
In all common law jurisdictions in the United States other than Georgia,1 state law provides a surviving spouse with a minimum share of the deceased spouse’s estate. The minimum share provisions are often referred to as the “elective share.” This is a marital right that may be waived in a marital agreement, such as a prenuptial agreement.
Gift, Estate and GST Exclusion Amounts for 2021
As 2021 begins, for now (although this may change, as described below) the current gift and estate tax exclusions, GST exemption amount, tax rates, and annual gift tax exclusion are as follows:
Federal
Gift and Estate Tax Exclusions
The gift and estate tax exclusion amount (also called the “applicable exclusion amount”) increased slightly from $11.58 million (in 2020) to $11.7 million (in 2021) per individual (or $23.4 million for a married couple).1 Estates of decedents survived by a spouse may still elect to pass any of the decedent’s unused applicable exclusion amount to the surviving spouse by an election made on a timely filed estate tax return for the decedent with a surviving spouse (also known as “portability”).
Affordable Care Act - How a Potential Unconstitutionality Determination May Affect Your Taxes
We bring to your attention a case that is currently pending before the U.S. Supreme Court that may affect the taxes of millions of U.S. taxpayers. The case - California, et al. vs. Texas et al. - addresses whether the Affordable Care Act (the “ACA”) is unconstitutional in its entirety.
ACA, Unconstitutionality and the Statute of Limitations - Sorting Out the Potential Mess
By George D. Karibjanian
The constitutionality of the Affordable Care Act (the “ACA”) is currently before the United States Supreme Court. An unconstitutionality determination may have ramifications for any taxpayer who has previously paid a tax created by the ACA.
This article was published in Bloomberg Tax, Tax Management Compensation Planning Journal 48 CPJ 08, 08/07/20. This article is available for download for personal use only; the article cannot be republished or redistributed without the express written consent of Bloomberg INDG.
Click HERE for the article.
FALL 2020 -- BEST TIME IN 100 YEARS TO MAKE GIFTS
This Client Alert explains why right now may be the best time in the past 100 years for clients to consider transferring wealth to successive generations.
Finding Security After the SECURE Act (Top 12 Things You Need to Know About the SECURE Act)
At the end of 2019 a new law called, Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the “SECURE Act”, was enacted. In our most recent Client Alert, we discuss the top 12 things you may need to known about the new law, and, importantly, how it may affect you.