Estate Planning Update

July 2024

  1. 2024 Annual Gift Tax Exclusion: increased to $18,000 per donor, per donee.
  2. 2024 Gift and Estate Tax Exemption: increased to $13,610,000 per donor through 2025 (an increase of $690,000). See paragraph 6 below.
  3. Marital Deduction for Transfers to U.S. Spouse: remains unlimited.
  4. 2024 Generation Skipping Tax Exemption: increased to $13,610,000 per donor through 2025. See paragraph 6 below.
  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. It is anyone’s guess whether the doubled amounts will be continued after December 2025 or allowed to revert back to the inflation adjusted base amounts (approximately half of the above amounts).
    • The Corporate Transparency Act (CTA) is a federal law which became effective January 1, 2024, and applies to most all closely held businesses. The law requires the reporting of certain entity and beneficial owner information. Failure to comply may result in civil penalties ($500 per day) and criminal penalties (imprisonment for up to 2 years and/or a fine up to $10,000).  CTA reporting for existing entities will be delinquent if not completed by December 31, 2024.  For more information on the CTA and compliance see www.deangelislegal.com/CTA and CTA Compliance Tips.
    • On April 23, 2024, the Federal Trade Commission (FTC), in a 3-2 vote, issued a final rule that bans noncompete clauses between workers and employers as “unfair method[s] of competition” under Section 5 of the FTC Act, subject to only a few exceptions. The final rule was slated to take effect September 4, 2024. However, on August 20, 2024 a US District Court in Texas issued a ruling blocking the implementation of the rule nationwide. For more information and updates on the FTC rule, see:  FTC Noncompete Ban Update.
  7. Arizona Topics: Under Arizona’s new “Grandpa in the Garden” bill, human remains may be turned into fertile soil that can be used in a loved one’s backyard or garden instead of traditional burial or cremation. The process is said to be cheaper than traditional burial or cremation methods and takes around 45 days to complete.  For more information see Arizona’s Human Composting Law
  8. Estate Planning Opportunities: While increased interest rates have reduced transactions and slowed down the real estate market, we continue to implement large asset transfers, mostly in trust, for spouses and children to make sure we use the increased estate tax exemptions before the sunsetting of the provisions at the end of 2025. GRATs, SLATs and ILITs remain viable tools. Individuals with more than $8,000,000, or couples with more than $16,000,000, who are either over the age of 80 or considering large gifts in the next ten years should consider accelerating these gifts before the exemptions are reduced.
  9. Quinn News: Garren W. Carroll, Esq. joined DeAngelis Legal as an attorney in April 2024. Garren has been practicing general business and estate planning law since 2005.  In addition to estate planning and probate, he has assisted small and medium-sized businesses with formation documents, corporate contracts and mergers and acquisitions. For more information regarding Garren and his practice, please visit our website at www.DeAngelisLegal.com or call him or Quinn at 480-281-1512.