Have you heard about the estate tax changes that may become law before the end of the year? While the current estate tax exemption sits at $11.7 million per person and $23.4 million per married couple, there have been proposals in the works to lower those numbers down to the  levels seen back in 2009. This would mean the estate tax exemption would be significantly reduced down to $3.5 million per person. Furthermore, estate tax rates would increase and the gift tax exemption amount could be reduced down to $1 million from where it currently rests at $11.7 million. Let us discuss how you can plan for these estate tax changes in the event that they turn into law.

To lower the vulnerability you may be subject to with an estate tax, you may want to consider making a lifetime gift. Considering the gift tax exemption amount is set to be lowered as part of the proposed plans, it may be better to make these gifts sooner rather than later if you can afford to do so. You may also want to consider making charitable gifts, which means some of your wealth will be transferred to one of your favorite causes and give you an immediate tax deduction.

Trusts can also be good options for protecting your estate from the estate tax. Using an irrevocable trust, you can transfer some of your assets into the trust, continue to receive distributions from the trust over your lifetime, and have the trust distribute the remaining assets to designated beneficiaries when you pass away. Assets held in the irrevocable trust will not be subject to inclusion in the estate tax calculation. For more information about estate tax changes on the horizon and how to best navigate them, please reach out to our office to schedule an appointment. We do telephone, computer, and face-to-face appointments. Our face-to-face appointments are held outside in the open air (frequently selected by clients for document signing) and inside our office conference room. We follow all CDC guidelines. Our office procedures adhere to COVID-19 safety protocols and are designed and enhanced by medical review and air quality engineering.