June 24, 2021

Volume XI, Number 175

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A Farewell to the Current Gift and Estate Tax Exemption?

We recently wrote about a window of opportunity to take advantage of the rising estate and gift tax exemption before it sets.

It is becoming clearer that the window may be shutting fast.  The opportunity to take advantage of the current gift exemption may be now as it appears that we soon may be saying farewell to it.

After passing the American Rescue Plan Act to address the ongoing COVID-19 pandemic, Congress appears to have turned its attention to comprehensive changes to current tax law.  For example, Senator Bernie Sanders proposed on March 25, 2021, legislation that, among other things, would 

  1. Reduce the amount exempt from the tax that an individual can give during life or leave after death to their children from $11.7 million to $3.5 million, and

  2. Make estate tax rates progressive, ranging from 45% to 65% depending on the total value of the estate.

The proposed effective date is January 1, 2022.  Though it remains to be seen whether Senator Sanders' proposed legislation becomes law, the significant risk of negative change to the estate tax law appears even greater.  The window of opportunity to use the current exemption could be as tight as now until December 31, 2021.  

There are a number of ways through thoughtful gift planning to use the current exemption amount or a portion of it.  With a strong push by some in Congress to reduce drastically the current exemption amount, the time to consult with an estate planning attorney is now to determine whether use of it while available is helpful to your family and you.  Otherwise, you may be saying farewell to a great opportunity to save estate tax.

© 2021 Ward and Smith, P.A.. All Rights Reserved.National Law Review, Volume XI, Number 88
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About this Author

John R. Sloan Trusts & Estates Attorney Ward and Smith Wilmington, NC
North Carolina Board Certified Specialist in Estate Planning and Probate Law

John leads the firm's Trusts and Estates practice. His practice experience encompasses estate planning, estate administration, estate and gift tax planning, and related services primarily, though not exclusively, to high net worth individuals and families. His practice also involves business succession planning for closely-held business owners, asset protection, and estate planning with IRAs and retirement accounts. John frequently lectures to civic and community groups and at continuing legal education seminars on various topics relating to estate planning and estate administration.

...
910-794-4805
Thomas Zamadics Estate Attorney Ward and Smith
Trusts and Estates Attorney

Tom works closely with individuals, families, and closely-held business owners to provide personalized plans to help identify and achieve their unique estate planning goals. His practice focuses on estate planning and estate and trust administration. He assists clients in the preparation of a wide range of estate planning documents, including wills, trusts, and powers of attorney.

Tom studied at Virginia Tech, where he graduated summa cum laude with a double major in International Studies and Economics. He continued his education at the University of North Carolina School...

919.277.9146
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