Year-End Estate Planning Opportunities
Whether or not you’ve been following the results of the Presidential and Congressional elections, you should be aware of some probable tax and estate planning implications.
Based on the expected makeup of the government next year, there are a number of significant opportunities you may be able to take advantage of, many of which may change in the near future. For example:
- The Federal Estate Tax Exemption Will Likely Decrease. There are any number of ways to strategically make use of all or a portion of the $11.58M federal estate tax exemption, which could eventually be reduced to pre-2018 levels under a Biden presidency. We strongly recommend gifting to the extent you are able to take advantage of this high limit.
- Historically Low Interest Rates Won’t Last. Interest rates have reached new lows in 2020, and individuals and families can develop powerful wealth transfer strategies with the formation of a grantor retained annuity trust (GRAT). More so, you can use those same low interest rates to establish promissory notes that can assist with transferring future appreciation.
- The Current Step-up in Basis on Inherited Assets Could be Eliminated. If President Biden adjusts or eliminates the step-up in basis on inherited assets, it could result in significant tax exposure for many individuals. Now is a good time to review your asset portfolio and determine if it makes sense to transfer a portion of those assets to trusts or other vehicles to limit your future exposure.
The most important thing to remember is that while we don’t know exactly when or what changes will take effect under a Biden administration, we know the current estate planning environment won’t last forever.
If you’d like to discuss any of these opportunities in more detail, please let us know, and we’ll have one of our tax and estate planning specialists reach out to you.
Material discussed in this communication is meant to provide general information and should not be acted on without obtaining professional advice tailored to you or your company’s individual and specific needs. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used by any person or entity, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This information is for general guidance only and is not a substitute for professional advice.
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