IDEAS FOR THESE TRANSITIONAL TIMES

As tax lawyers and estate planners, we see that there is a lot of uncertainty and speculation in the marketplace about what the estate and gift tax system will look like if Joe Biden should defeat Donald Trump in the November 2020 election.  We all know that under current law, the estate and gift tax exemption is at an all time high of $11.58 million per person or over $23 million per couple.  Under current law, the exemption amount is designed to revert back to $5 million per person and $10 million per couple (adjusted for inflation) at the end of 2025.

Many commentators have speculated that if Joe Biden wins the presidency, the estate tax exemption will be scaled back to $5 million per person (adjusted for inflation) or even lower to the 2009 level of $3.5 million per person; however, as of October 1^, 2020, a review of Mr. Biden’s tax plan does not contain a definite proposed reduction.  Moreover, his proposed tax plan does not specifically contain an increase in estate tax rate of the current 40% tax.  The one thing Biden’s platform does contain is a statement that the step up in basis at death should be repealed.  Even in the absence of proposed guideposts, nearly everyone predicts that if there is a Biden victory, the estate tax exemption will be scaled back, and the estate tax rate will increase.  Thus, for families with gross estates in the $10-$20 million range, or above, now is the time to consider implementing tax and estate plan strategies to take advantage of lifetime gift opportunities that will likely disappear effective January 1, 2021 if Biden is elected.

Even if your net worth is not over $10 Million we have plenty of sophisticated strategies and techniques which could be implemented depending on your asset mix, goals, and objectives.  The tools in our toolbox include sales to intentionally defective grantor trusts (IDGTs) in exchange for promissory notes to fix growth, the creation of spousal limited access trusts (SLATs), creations of charitable trusts and foundations, and other sophisticated techniques which are both time tested and flexible.

If you are a current client, prospective client, financial advisor, or other interested party, please contact Jeffrey D. Moss or your Dawda attorney for more information.

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While it is hard to believe, in 2008, Congress passed a resolution that designated the third week of October as National Estate Planning Awareness Week.  At Dawda, our group of estate planning and tax attorneys dedicate nearly every week to estate planning, and we were overjoyed to learn that Congress designated this particular week to emphasize how important planning for future transfers of wealth can be.

We have always thought our role in the estate planning process was to meet with our clients, listen to their particular situation, and draft comprehensive and holistic documents to take into account the goals and objectives of our clients.  A good estate plan should be durable, flexible, and work across a broad spectrum of circumstances.  We also believe that an estate plan should be tax efficient, avoid the probate court, and we emphasize advising and assisting our clients in funding their trusts and making proper beneficiary designation to integrate all the different items.

Good candidates for estate planning are families with young children, blended families, and families with significant assets to manage.  This is a great time to dust off your old estate plan and review it to make sure all the pieces still work, or it is a great time to establish a relationship with one of our estate planning attorneys to create your estate plan.  Please do not hesitate to contact me or your Dawda attorney for more information.

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Jeffrey Moss, Alfredo Casab and John Mucha of the law firm participated in several events with the delegation, giving presentations regarding business formation, contract drafting and pitfalls, and other aspects of doing business in the United States.

Our broad range of expertise allows us to routinely provide legal counsel and assist start-up companies, including foreign companies wishing to establish a presence in Michigan.

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