ESTATE TAX UPDATE

You may have noticed a collective sigh of relief coming from the estate tax planning community over the last few weeks. In its early drafts of the Build Back Better legislation, Congress had been flirting with some fairly dramatic changes to the U.S. transfer tax system. However, it looks like those changes have now been removed from the proposed legislation. We know your life is busy, so below is a quick recap of some of the proposed changes:

  • Estate tax exemptions of $3.5 million;
  • Gift tax exemptions of $1 million;
  • $20,000.00 annual gift tax exclusion;
  • 50-year limit on GST trusts;
  • Grantor trust inclusion in the taxable estate;
  • No discounts for FLPs funded with non-business assets; and
  • GRATs would be a minimum of 10 years and have remainder requirements.
  • Deemed realization of capital gain at death, subject to some exceptions.

This may all seem very esoteric, but these provisions would have been the most significant change to how the U.S. has taxed the transfer of wealth in over 40 years. With the legislation still in negotiations, it is possible that some of these proposals could come back. However, it has been encouraging to hear that the momentum has been heading in a more taxpayer-friendly direction.  Stay Tuned!

If you have estate planning, Trust, and Probate Law questions, the attorneys at Pickrel, Schaeffer & Ebeling can help. Don’t hesitate to get in touch with us at 937.223.1130 or email jclough@pselaw.com.

AUTHOR: John Clough
jclough@pselaw.com


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