Preservation | Family Wealth Protection & Planning

Now that the new year has arrived, it is a good time to catch up on the latest tax rates for estate and trust income tax brackets and exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. The Internal Revenue Service adjusts these figures annually for cost-of-living increases.

The COVID-19 pandemic has forced many people to think pragmatically about the possibility that they or their loved ones might fall ill. Having an estate plan in place can ensure that your wishes are honored and your loved ones are taken care of in the event of your incapacity or death.

This is the first in a blog series on opportunities for tax planning in the current uncertain, low-interest rate environment. Future installments will cover one-time and annual gifting, making or refinancing loans, creating Grantor Retained Annuity Trusts, family limited partnerships and limited liability companies, installment sales to defective grantor trusts, and charitable giving.

*This publication has been updated to reflect recent IRS guidance.

Although many aspects of the CARES Act focus on relief for small businesses and employees, there are several provisions that are relevant to estate planning.  These provisions may influence planning decisions this year and in the future, including those related to charitable giving and retirement plans.

The IRS has posted an Economic Impact Payment Information Center that addresses many frequently asked questions regarding the stimulus payments authorized by the CARES Act. However, like many things related to the act, there are remaining questions and gray areas not contemplated by the act or fully addressed at this time by the IRS. One of these questions is how to address the receipt of a payment for a deceased individual.