Preservation | Family Wealth Protection & Planning

How many times have you prepared your income tax returns for the previous year, only wishing you knew then what you know now, so you could go back and make more advantageous tax decisions? In most cases, you are stuck with the decisions you made before the new tax year began, even though you may not have all the relevant tax information available to assist with those decisions until several months into the new tax year. Too bad, says the IRS, unless you are an estate or trust.

The past few years have seen a period of historically low interest rates, but the Federal Reserve has made multiple increases to the federal funds rate that have resulted in interest rate increases across the board. This will affect estate and wealth-transfer strategies in 2023 and beyond, as “we will likely see a shift from strategies that are more effective in a low-interest rate environment, to planning ideas that may benefit from higher rates,” writes Greensfelder Officer Keith Grissom for Rethinking65.

The SECURE 2.0 Act of 2022, signed into law by President Joe Biden on December 29, 2022, makes significant changes to the administration and taxation of retirement plans. It addresses many practical concerns that surfaced after the passage of the original SECURE Act in 2019 and during the pandemic. Some of the key changes are set out below.

Sometimes leaving an inheritance to a loved one who has a disability can do more harm than good. Many public benefits programs have asset limitations for beneficiaries to qualify to receive assistance. If a well-intentioned relative leaves funds to a beneficiary who has a disability without having the proper safeguards in place, the beneficiary may be required to pay penalties or become ineligible to receive public benefits. There are options available to provide for such beneficiaries without compromising their eligibility for public benefits.

Many reconnect with their family during their vacations. Your family may own a home on the beach, in the mountains, or in the country where multiple generations gather each year. The home may have been in your family for generations, or it may be newly purchased. Regardless, the family vacation home is a unique asset that symbolizes important memories and family connections. For this reason, you should specifically address the vacation home in your estate plan to avoid hard feelings and even disputes.

Wolters Kluwer and Bloomberg Tax have released projected 2023 figures for the gift tax annual exclusion amount as well as the estate and gift tax lifetime exemption amount. These figures were determined using formulas contained in the Internal Revenue Code. They are based on the increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the 12-month period that ended August 31, 2022.

The June 2022 decision by the Federal Reserve to raise the federal funds rate by 0.75 percent marks the largest such increase in 28 years. Among the many areas this move will affect are estate and wealth transfer planning, as many common strategies have an interest component that can have a significant impact on the success of the strategy.

It’s that time of year again!  The start of 2022 has brought us an increase in exemption amounts for estate, gift, and generation-skipping transfer (GST) taxes. Each year, the Internal Revenue Service adjusts tax rates to provide for annual cost-of-living increases.

How many times have you prepared your income tax returns for the previous year, only wishing you knew then what you know now, so you could go back and make more advantageous tax decisions? In most cases, you are stuck with the decisions you made before the new tax year began, even though you may not have all the relevant tax information available to assist with those decisions until several months into the new tax year. Too bad, says the IRS, unless you are an estate or trust.

Wolters Kluwer has released projected 2022 figures for the gift tax annual exclusion amount as well as the estate and gift tax lifetime exemption amount. These figures were determined by Wolters Kluwer using formulas contained in the Internal Revenue Code. They are based on the increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the 12-month period that ended August 31, 2021.