By Michele Gartland
While election results are in, as of this writing they are still being contested and much in terms of tax policy remains uncertain. Any changes may hinge on the composition of the Senate which is subject to the two Georgia runoff races in January. Potentially at stake are: (1) a reduction in the federal estate tax exclusion amount, (2) elimination of a “stepped up” basis upon death, (3) changes in the corporate tax rate, and (4) changes to income tax rates and brackets. These are just a few of the possible tax changes being discussed. Many are considering using their lifetime gift tax exclusion amounts sooner rather than later through outright gifts or the creation of trusts. Here in Connecticut we need to be mindful of the impact of the current state exclusion amount as well.
Adding to the difficulty in planning is the uncertainty of when these changes might take effect, if implemented at all. If they are retroactive to the beginning of 2021, which many view as unlikely, but some people fear, the window to act is short. If the new tax laws take effect at the end of 2021, there will be more time to plan and act. As attorneys, we are trained to think in terms of contingency planning. With awareness of the issues, you can evaluate the potential risks and impact on your own situation. Should you wish to discuss how best to position yourself for the future, we are here to support you and to review options with you.
Michele Gartland provides expertise in a wide range of estate planning techniques and corporate matters. She can be reached at 203-202-9686, extension 209.