Estate Planning Update

July, 2022

1. 2022 Annual Gift Tax Exclusion: increased to $16,000 per donor, per donee.

2. 2022 Gift and Estate Tax Exemption: increased to $12,060,000 per donor through 2025, see #6.

3. Marital Deduction for Transfers to U.S. Spouse: remains unlimited.

4. 2022 Generation Skipping Tax Exclusion: increased to $12,060,000 per donor through 2025, see #6.

5. Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.

6. National Topics: The current Gift and Estate Tax Exemption is doubled to get to the amounts set forth above and the question is, will the doubling (a) be extended beyond 2025 (b) be allowed to expire at the end of 2025 or (c) reduced before then? In September of 2021, the US House Ways and Means Committee proposed legislation that would have accelerated the reduction in the estate tax exemption to January 1, 2022. While the estate tax change was dropped several months later, it caused quite a stir in the estate planning world as high net worth clients had to accelerate the implementation of more sophisticated techniques. This year’s “Green Book” from the Treasury department targets GRATS, valuation of promissory notes and changes to the generation skipping tax, but does not address the exemption. All eyes are on the results of the mid-term elections. Until then, last year’s chart on who should take action is still applicable, a link to the chart is here: 2021 Estate Planning Update with Chart.

7. Arizona Topics: Anyone owning real estate in Arizona the last couple years has seen substantial appreciation in this asset class. Even with a market correction, these gains can impact the taxation and allocation of assets among your beneficiaries. If you have not reviewed your plan in the last five years, it is time to review your plan, even if it is to confirm the correct titling of assets and update your powers of attorney.

8. Quinn News: The firm welcomed two new employees. Madison Ruiz joined the firm at the end of 2021 and is responsible for all things communications and Renae Cranston, our new paralegal, joined us in the spring to keep documents flowing.