Castle Rock,United States - April 27, 2022 /PressCable/ —
After witnessing one of the most extreme pandemics in history and seeing massive proposed changes to tax laws, individuals are still avoiding estate planning. In a recent survey by Caring.com, 67% of the thousands of individuals surveyed, said they have not made any plans for the worst case scenario and have completely disregarded the need for an estate plan, despite Covid 19 having raised American’s awareness of the need to have a will, living trust or living will, and the powers usually associated with estate plans. Only about a third of those surveyed had an estate plan, and most of these respondents were senior citizens planning for their eventual death. Younger citizens appear to be waiting for an inciting event to consider estate plans, wrongfully thinking the only benefits are after death. The survey found that those who recently experienced a serious case of Covid were 66% more likely to engage with an estate planning attorney, than those who have not, however, none of those surveyed knew about President Biden’s new “Revenue Proposals”.
While waiting for a terminal or critical event to incite the creation of an estate plan may be comfortable, President Biden is providing many additional reasons to plan ahead. On May 28, 2021, the United States Department of Treasury issued a report entitled “General Explanation of the Administration’s Fiscal 2022 Revenue Proposals” (generally referred to as the Green Book) which provided a brief overview of proposed changes that effect estate planning.
Long-Term Capital Gain Recognition
Under the current proposal outlined in the Green Book, there will be a realization of capital gains to the extent such gains are in excess of a $1 million exclusion per person, upon the transfer of appreciated assets at death or by a gift, including transfers to and distributions from irrevocable trusts and partnerships. The proposal would provide various exclusions and exceptions for certain family-owned and operated businesses. This is a major change from current tax law. In general, the current tax laws provide that the recipient’s basis of property acquired at death is the fair market value of those assets as of the decedent’s date of death. The recipient’s basis of property acquired by gift is the same as the donor’s basis as of the date of such gift. There is no realization event when property is acquired at death or via gift, unless and until that property is subsequently sold (and any gain would be determined based on the recipient’s adjusted basis).
In addition, gains on unrealized appreciation will be recognized by a trust, partnership or other non-corporate entity at the end of an applicable 90-year “testing period” if that property has not been the subject of a recognition event during that testing period. The 90-year testing period for property begins on the later of January 1, 1940 or the date the property was originally acquired, with the first possible recognition event to take place on December 31, 2030. Under the proposal outlined in the Green Book, realized gains at death could be paid over 15 years (unless the gains are from liquid assets such as publicly-traded securities). There would be no gain recognition for transfers to U.S. spouses or charities at death. The Green Book states the above-referenced changes would be effective for property transferred by gift, and property owned at death by decedents dying, after December 31, 2021.
Potential Transfer Tax Provisions and Retroactivity
Noticeably absent from the Green Book are any changes to the federal estate, gift and generation skipping transfer (GST) tax system that President Biden proposed during his campaign. Currently, the exemptions for the federal estate, gift and GST tax are $12.06 million per individual (indexed for inflation) and up to 24.12 million for married couples, which President Biden proposed lowering to a base of $3.5 million per individual and increasing the estate tax rate from 40% to 45%. The absence of any proposed changes to the transfer tax system currently does not mean that such changes will not be proposed by the Biden Administration at a later date.
Although most Americans are now motivated by having witnessed death and uncertainty, and because President Biden is proposing dramatic changes to tax laws, the primary reason for not having an estate plan appears to be a perception that it is a difficult task. According to 40% of respondents, the biggest reason given for not having an estate plan was they just haven’t gotten around to it, 33% said they don’t have enough assets to bother, and 13% said the estate planning process is too costly, while 12% said they don’t know where to begin.
Estate Planning Attorney, Grant Van Der Jagt said, “You do not need to have lots of assets to benefit from having an estate plan, in fact, having an estate plan can help you develop and protect lots of assets from litigation. Young adults stand to benefit the most from an estate plan over their lifetime, and most people under appreciate the health care planning.” Companies like www.Lifetime.Estate make it easy. They have attorneys that create custom and comprehensive estate plans for people which are guaranteed for life at a very affordable flat fee price, and then they continue to offer estate planning assistance for the duration of the client’s lifetime, as well as “after care” to help heirs handle the estate after the client’s death. How easy can it be? The average estate plan created by Lifetime.Estate takes less than an hour for the client to complete. Although many people try to solve their estate concerns themselves using online forms or financial planners, this may be more challenging than it is worth. Many forms are not valid in every state nor are they updated to comply with new laws or customized for a particular circumstance. There is value in having an attorney draft your estate plan. 30-minute consultations with attorneys at Starzynski Van Der Jagt P.C. are free (866-463-2946) and they create estate plans for anyone in the world.
Contact Info:
Name: Grant Van Der Jagt
Email: Send Email
Organization: Starzynski Van Der Jagt P.C.
Address: 200 S. Wilcox St. Ste. 206, Castle Rock, CO 80104, United States
Phone: +1-866-463-2946
Website: http://www.vdjlaw.com
Source: PressCable
Release ID: 89073997
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