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tax law changes

Estate Planning in Light of Tax Reform: Your Questions and Our Answers – 2020 Update

By and Blog
This post will help you unpack some of the estate and gift tax provisions of the 2017 Tax Reform Act, as well as answer some of the most pressing questions raised by the changes. In a nutshell, what stayed the same and what changed? One major item that stayed the same is the simple existence of an estate tax. The initial tax reform bill from the House called for a complete elimination of the estate tax, which didn’t make its way into the final law. Trump had also talked about altering the current date-of-death basis step-up for gains above a…
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IDGT

What is an Intentionally Defective Grantor Trust (IDGT)?

By Guides & Whitepapers
Intentionally Defective Grantor Trusts (“IDGTs”) are a commonly used estate planning vehicle to transfer wealth to family members during the life of the grantor. In this White Paper we will explore the four tax types relevant to IDGTs, and the mechanics of how IDGTs work. The use of the phrase “intentionally defective” is confusing, but it simply refers to an irrevocable trust where the grantor pay the trust’s income tax bill during his or her life. What taxes relate to an IDGT? There are four types of taxes to consider: estate, gift, generation-skipping transfer (GST) and income. An IDGT allows…
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cliff

Mitigate New York’s Estate Tax Cliff with Smart Estate Planning and Gifting Strategies – 2020 Update

By and Blog
While the large increase in the federal estate tax exemption has provided many with federal estate tax relief, New Yorkers must continue to plan for New York estate tax. For a quick review of the New York Estate Tax “Cliff” basics, see the “Understanding New York’s Estate Tax “Cliff” blog post. What is the current exemption from New York estate tax again? The current New York estate tax exemption amount is $5,850,000 for 2020. Under current law, this number will remain until January 1, 2021, at which point it will rise again with inflation. Who does the Cliff affect? Everyone…
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gst tax

Basics of Federal Estate, Gift and Generation-Skipping Transfer (“GST”) Tax – 2020 Update

By and Blog
The bad news is that there is a Federal tax on assets that you give away during life, at death, and to individuals two or more generations below you. The good news is that this tax will only apply to the wealthiest Americans and, even so, there are strategies you can use to minimize or avoid its application. The Federal estate, gift and GST tax only kicks in above a certain dollar threshold. Furthermore, there are additional wealth transfer strategies that do not trigger any tax at all if structured properly. Taxable Gifts There is a Federal estate and gift…
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gifting 2019

Do I need to make gifts before the end of the year?

By Blog
With all of the political uncertainty and recent changes in the tax law, our clients are wondering what to do about gifting. Below are answers to three commonly asked questions that we are getting this time of year. Note that this blog covers non-charitable gifts.* 1. Do I need to make gifts before the end of the year? Only if you are making annual exclusion gifts. You may give away $15,000 per person ($30,000 if gift-splitting with a spouse) each year tax-free. If you want to use your annual exclusion for 2019, the gift needs to be completed before the…
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new york estate tax cliff

Understanding New York’s Estate Tax “Cliff” – Updated October 2019

By Blog
It has been more than six years since some dramatic changes were made to New York’s gift and estate tax law. For many clients, the subject of the New York estate tax “cliff” continues to remain a source of confusion. This is for good reason. The New York cliff is not easy to understand, nor is it easy to know how it may impact your particular situation. The answers below are intended to guide those who remain baffled by the New York estate tax cliff. For a quick snapshot of the 2019 estate and gift tax rates for New York…
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disability planning

Basics of Disability Planning

By Blog
Currently over 61 million Americans live with a disability, and statistically the average American worker has a 1 in 4 chance of becoming disabled during their career. Nearly everyone can benefit from the creation of a basic disability plan. A basic disability plan should allow your chosen representative to make financial and medical decisions on your behalf if you are incapable of doing so. It is a position of extreme power and you should consider many factors when choosing your representative. The basic building blocks of disability planning typically involve the signing of a power of attorney, health care proxy…
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gst tax

Important Gift Tax and Trust Income Tax Reminders

By Blog
As tax season is now in full swing, below are some important gift tax and trust income tax return reminders: Gift Tax Returns The lifetime exemption from gift and estate tax was $11,180,000 per person in 2018. Currently it is $11,400,000 per person for 2019. Generally, gifts made directly to a medical provider or educational institution on behalf of someone do not count against your lifetime exemption. In addition, donors have an annual exclusion from gift tax of $15,000 per donee. This means that a donor may give $15,000 to each of his or her three children, for example, without…
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account beneficiaries

Pay Attention to How Your Accounts are Titled

By Blog
Does this blog post apply to you? Do you have sizeable jointly-held accounts with your spouse? Is your estate large enough that it could be subject to federal or state estate taxes? If you answered yes to both of these questions, then pay attention, because your Will may not do what you think it does. What’s the problem here? Your Will is not the end of the story. Your Will might only “work” if you title your accounts properly. It’s not uncommon for us to see well-drafted Wills with solid tax planning incorporated into the estate plan. In the case…
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POAs

Designating Powers of Attorney (POAs)

By Guides & Whitepapers
Selection, Documentation, and Communication Best Practices Most of our clients put Powers of Attorney or “POAs” in place as they age. POAs are legal documents that allow you to name an “agent” (also sometimes referred to as an “Attorney-in-fact”) to act on your behalf for financial or health care decisions, and are key components of any estate plan. We believe POAs are increasingly important beyond your estate plan too. Consider the following examples: Parents of college-aged adult children need healthcare POAs to interact with doctors and be involved with their children’s health care decisions. A business associate needs a non-durable…
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