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Stimulus, IRS Extended Deadline and Gifting Opportunities

Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

  • President Trump signed the CARES Act on March 27, 2020, a $2 trillion stimulus package providing $560 billion of relief for individuals, including:

    • Cash Payments: $1,200 per individual ($2,400 for couples); plus $500 per qualifying child1

    • Retirement Funds: Early withdrawal penalties waived for distributions of up to $100,000, if withdrawal is for coronavirus related purposes

    • 401(k) Loans: Loan limit increased from $50,000 to $100,000

    • Required Minimum Distributions: Suspended in 2020 for IRA/401(k) plans, including inherited IRAs

    • Charitable Deduction: Up to $300 charitable deduction for 2020 taxpayers who utilize the standard deduction

Extension of filing and payment deadlines

  • The federal and Wisconsin income tax return filing and payment deadline for the 2019 tax year was automatically extended to July 15, 2020

  • The federal gift tax return filing and payment deadline for the 2019 tax year was automatically extended to July 15, 2020

Gifting opportunities

  • Low valuations, low interest rates, and the anticipated reduction in the federal estate/gift tax exemption from $11.58 million to approximately $6.5 million on January 1, 2026 have created many planning opportunities, including:

    • Gifts and/or sales to existing or newly established Trusts to take advantage of low valuations and use the $11.58 million exemption while it is still available;

    • Amending intra-family loans to take advantage of low interest rates; and

    • Creation of charitable lead trusts, grantor retained annuity trusts, and other estate planning techniques that benefit from low interest rates are particularly attractive right now.

Now may also be a good time for clients to review their existing estate plans to make certain that their plans are up to date and consistent with their wishes.


1Amounts are phased down for individuals making more than $75,000 ($150,000 for couples) and phased out for individuals making more than $99,000 ($198,000 for couples)

Copyright © 2020 Godfrey & Kahn S.C.

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About this Author

Jeffrey Billings Estate Planning Attorney Godfrey & Kahn Law Firm
Shareholder

Jeff Billings is a shareholder with Godfrey & Kahn’s Estate Planning, Estate & Trust Administration Practice Group, practicing in the firm’s Milwaukee and Appleton offices. He regularly works with families, business owners, executives, doctors, and other professionals to grow, manage and protect wealth. Jeff provides clients with comprehensive planning solutions covering a range of services, including core estate planning, business succession planning, complex gifting strategies, inter-generational wealth planning, estate and trust administration, charitable giving, and asset...

414.287.9615
Ryan Van De Hey Estate Planning, Estate & Trust Administration Attorney Godfrey & Kahn Madison, WI
Associate

Ryan Van De Hey is an attorney in the Estate Planning, Estate & Trust Administration Practice Group in the Madison office. His areas of practice include wills and trusts, business succession planning, estate tax gifting strategies, fiduciary income taxation, estate and trust administration, and probate administration. Ryan employs a practical approach to estate planning to ensure that every custom plan minimizes certain tax risks and administrative hassles as efficiently as possible.

Ryan is also a member of the firm’s Estate, Trust and Fiduciary Litigation Practice Group. He works in tandem with the firm’s litigation attorneys to thoughtfully and strategically advise corporate fiduciaries and individuals through sensitive disputes.

Practice Areas

  • Estate Planning, Estate & Trust Administration Overview
  • Estate, Trust & Fiduciary Litigation
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