Quinn DeAngelis, P.C.
Kierland Business Center
15849 N. 71st Street, Suite 100
Scottsdale, Arizona 85254
Estate Planning Update
1. 2015 Annual Gift Tax Exemption: remains at $14,000 per donor, per donee.
2. 2015 Gift and Estate Tax Exemption: rose to $5,430,000 per donor, inflation adjusted.
3. Marital Deduction for Transfers to U.S. Spouse: Unlimited.
4. 2015 Generation Skipping Tax Exemption: $5,430,000 per donor, inflation adjusted.
5. Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.
6. Federal Legislation: The President continues to keep the iron warm by keeping estate tax reform in his budget proposals. He prefers to drop the exemption to $3,500,000 and increase the top rate to 45%. However, given that the Republicans control both houses, I doubt any changes are coming in the estate tax area in the near future. Income tax reform however, may be a topic of discussion if not action as people start paying the net investment income tax enacted as part of the Affordable Care Act, which imposes a 3.8% tax on “net investment income”, defined as dividends, capital gains, interest, rents and royalties.
7. State Legislation: There are few notable items on the agenda for the 2015 legislative session. Therefore, we continue to suggest reviewing revocable trusts prepared prior to 2007. If you have not reviewed your plan since 2007, please contact me to schedule a review.
8. Planning Issues to Review: (i) Is my named successor trustee appropriate under the circumstances? (ii) Is the A/B or bypass trust structure still appropriate if my assets are less than the Estate Tax Exemption? (iii) Who should I name as the beneficiary of my Individual Retirement Account and/or 401k? (iv) What can I do now to ease the transition upon my death or disability?
9. Planning Opportunities: While the exemption amounts are stable from last year, asset valuations and interest rates are rising which continues to make loans, gifts in trust, grantor retained annuity trusts, charitable lead trusts and sales with deferred payments extremely attractive. Last year my firm amended or terminated more irrevocable trusts than we created, so let me know if you want to clean house and amend or kill an old trust.
10. Quinn News. Last year I received my certification as a specialist in Estate and Trust law by the State Bar of Arizona, a distinction held by fewer than 40 attorneys in Arizona and this year the Arizona Attorney magazine published my article “3 Months – Estate Planning before emergencies strike” in its February issue.