2021 Update for Estate Planning Tax & Exemption Considerations

By Attorney Jeffrey A. Robbins

The last year, particularly on account of the pandemic, has been a challenge to say the least. Hopefully, we will see a return to a more encouraging “normal.” Many of us remain concerned but are newly encouraged and motivated to make sure that our affairs are in order, particularly our estate plans. With a new administration, it is likely that the current income tax, gift tax, estate tax and generation-skipping transfer tax rates and applicable exemptions will become more onerous. This will be accomplished through a combination of increases in tax rates and the lowering of exemptions. 
 
Time is of the essence, because there is no telling what the effective dates of these new acts might be.  There is no assurance that these rates and exemptions will be in effect for even the balance of 2021. We encourage our clients and their advisors to review their estate plans for changes that have occurred, are scheduled to occur, or may be enacted into law. The attached newsletter (click here to open) highlights these issues and provides a “checklist” of planning opportunities.  Obviously, each client’s situation is unique and there is no “one size fits all” solution.

In reviewing our clients existing estate plans we are acutely aware that their plans are failing to address the impact of the SECURE Act on the designation of their qualified plan assets (IRS/401K/Roth/Profit Sharing/Pension Plan) and the provisions in their revocable trusts resulting from the imposition of a 10 year payout on non-spousal inherited retirement benefits.  In many instances these accounts have multi-million holdings and are a significant portion of the client’s estate.

Finally, we are seeing that little or no attention is being paid to monitoring and planning for assets held in irrevocable trusts. These trusts can be decanted or modified or otherwise rehabilitated to alter the beneficial interests as well as eliminating unrealized capital gains on assets held in these trusts. If you are a fiduciary, you have an extra obligation to monitor these trusts which invites periodic review.
 
We look forward to working with you and are available to answer any of your questions. Please feel free to forward this to you friends and colleagues, and let us know if you want anyone to be added to our email list.
 
Call us today so we can help provide you and your family with the peace of mind that comes from knowing that you have an estate plan that accomplishes your goals and avoids unnecessary attorneys’ fees, headaches, or conflict for your grieving family in the event you become incapacitated or when you pass away.

Jeffrey Robbins        248-230-2722          jrobbins@hertzschram.com

Laurie Raab              248-636-1566          lraab@hertzschram.com

We encourage you to reach out with any questions or if you have any other business or personal needs, please contact the Hertz Schram legal team at (248) 335-5000 if you would like to learn more about your legal rights and options.