Saturday, October 10, 2020
Here are tips to consider when working through your estate plan in the last few months of 2020:
- Planning with Continued Low Interest Rates
You may be able to take advantage of Grantor Retained Annuity Trusts (GRATs) or Charitable Lead Annuity Trusts (CLATs) to take advantage of the historically low interest rates.
- Lower Values in Commercial Real Estate
Now is an ideal time to gift interests in property assets, which can be used to take advantage of the current tax exemption.
- Checking the Existing Basic Estate Plan
Now is the time to go back over your estate plan to make sure your wishes are adequately reflected. You should review your testamentary provisions and should consider testamentary tax strategies that take the upcoming Presidential Election into account.
- Check Advance Directives and Durable Powers of Attorney
Given the uncertainty due to the pandemic, now is a good time to consider an advance directive for health care and to designate a durable power of attorney.
- Checking Existing Estate Planning Strategies
Review your estate planning strategies to ensure that they are still effective. Given the uncertainty and change that this year has produced, your strategies may need updating.
- Renegotiate Family Loans
The provisions in your loans or other documents many no longer be desirable or there may now be batter strategy for you. You may be able to renegotiate and amend the provisions of these documents to better align with your strategy.
- Using (or Losing) AEA before 2021 (or 2026).
The $11.58M Tax exemption is expected eclipse at the start of 2026, however, this may happen sooner if Former VP Joe Biden is elected. Therefore, if you do not take advantage of the exemption, you may lose it forever.
- Don't Forget about the GST: Are Existing Trusts Being Optimized
- Strategize about Business Succession and Long-Range Planning
The lockdown that began in March not only locked down the economy, "it created a unique environment for business owners to stop and reflect about their enterprises and the future." It may be time to consider business succession and create a favorable strategy to plan for the future.
- Consider State Estate and Income Tax Effects on Your Domicile
See Joseph P. Scorese, Estate Planning Tips as We Emerge from a Pandemic and Head into a Presidential Election, Sills Cummis & Gross P.C., October 8, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.