New York Estate Planning & Elder Law Blog
As we approach the end of 2021, you should remember to consider and approach many aspects of estate planning. There are also several considerations given potential legislative changes. You should make sure to review your end-of-year estate planning concerns now instead of waiting. This article reviews some of the important issues that you should remember while you prepare your estate plan for the future.
Passing on Gifts Before 2022
The rate for federal tax exemptions is currently higher than it has ever been. If a person does not use these high thresholds, they cannot do so in the future. As a result, now is an ideal time to make the most of available valuation discounts. Some of the factors to consider for gifts that are made in 2021 include:
- Business interests qualify for valuation discounts that provide opportunities to make the most of estate and gift tax exemptions.
- It takes time to review and plan for lifetime gifts, particularly large ones. This means that the sooner you begin the process of planning for gifts, the better off you will be.
Estate Planning Issues to Consider Before the End of 2021
Several issues should be considered while engaging in estate planning before 2022, which include:
- Federal exemptions for passing on assets and making gifts in 2021 are $11.7 million. These exemptions are temporary and poised to return to the previous threshold at the beginning of 2026. The new exemption amount is $5 million, which is less than 50% of the current limit. Additionally, other substantial changes to federal estate and gift taxes might also occur.
- Given potential looming changes, it’s a good idea to consider if making a gift of your assets while you are still alive is a good idea for your loved ones.
- The end of the year is always an ideal time to review your estate plan and consider whether you should make revisions to it. This might mean updating your will, power of attorney, or trust terms.
Giving to Charities Before 2022
The 2020 CARES Act attempts to foster charitable giving and charitable giving provisions. The Act encourages these acts by increasing expanding some benefits to the end of 2021 due to the Consolidated Appropriations Act, which was passed on December 27, 2020.
The Act authorized a deduction of $300 for cash charitable gifts that are made by taxpayers who non-itemize their taxes.
The Act also raised the adjusted gross income percentage for certain contributions by taxpayers who pay taxes by itemizing.
Planning for Income Tax Issues Before 2022
As a result of the likelihood of potential changes in taxes in the next few years, the owners of businesses should make sure to discuss before the end of 2021, potential changes to c critical areas like:
- 1031 exchanges
- Capital gain rates
- Corporation losses
- Individual income tax rates
Contact an Experienced Estate Planning Attorney
Estate planning can be a challenging process, but a skilled attorney can help. The lawyers at Ettinger Law Firm are up to date with the most current estate planning issues and focus on achieving the goals of clients. Contact our l