Estate Planning Update
- 2017 Annual Gift Tax Exemption: remains at $14,000 per donor, per donee.
- 2017 Gift and Estate Tax Exemption: rose to $5,490,000 per donor, inflation adjusted.
- Marital Deduction for Transfers to U.S. Spouse: unlimited.
- 2017 Generation Skipping Tax Exemption: $5,490,000 per donor, inflation adjusted.
- Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.
- National Topics: Uncertainty, again. The election results give the Republicans control of the capital and they remain intent on repealing the estate tax. President-Elect Trump prefers to convert to a carryover basis regime for assets over $10,000,000. But don’t hold your breadth. In August, the IRS created a stir by publishing proposed regulations that would dramatically affect valuation discounts frequently used in Family Limited Partnerships and other estate planning techniques. Given the extent of the comments received on the proposed regulations and the results of the election, the unofficial word from the Treasury Department is that it is revising the regulations and that the regulations will not be effective until the final regulations are issued.
- Arizona Topics: Arizona’s economy continues to improve. Post-election optimism has created some momentum that hopefully will continue throughout the year. As asset values increase, so does the propensity for beneficiaries to argue over assets, so please make sure your estate plan is clear and accurately reflects your intentions given your current financial condition. The Arizona legislature continues to work on mental health issues.
- Planning Issues to Review: (i) Is my named successor trustee appropriate under the circumstances? (ii) If my assets have increased over the last couple years, what affect does it have on my distribution scheme in my will or trust? (iii) Is the A/B or bypass trust structure still appropriate if my assets are less than the Estate Tax Exemption? (iv) Who should I name as the beneficiary of my Individual Retirement Account and/or 401k? (v) What can I do now to ease the transition upon my death or disability? (vi) Have I communicated in writing my desires for funeral/memorial services and burial or cremation?
- Planning Opportunities: With the estate tax conversation being bantered about in Washington, we do not recommend making taxable gifts at this time, but continue to implement non-taxable strategies. Interest rates are moving up which can affect the viability of these techniques, but some still remain reasonable. If you want to explore the alternatives available to you, please give us a call.
- DeAngelis Legal News: A big welcome to former clients of Bill Gibney who retired January 1, 2017 and referred his clients to us. Our new website is up, so now you can see more information on estate planning, business planning and our current projects all in one place.