- have an estate of $1,000,000 plus,
- are using annual exclusion gifting to fund insurance premiums in an irrevocable life insurance trust (ILIT),
- have grantor trusts, including rolling GRATs, or any other trust strategies,
- are front-loading 529 contributions for children or grandchildren,
you may want to reevaluate your planning strategies early in 2020.
For example, key Congressional members have proposed the following:
- Lowering the gift tax exemption to $1,000,000 in 2020 (not indexed for inflation).
- Lowering estate tax exclusion to $3,500,000 (indexed for inflation, with portability).
- Eliminating discounting (in case of family owned businesses).
- Reducing your annual gift exclusion amounts to $10,000 per donee/year.
- Limiting annual gift exclusions to $20,000 per donor/year.
- Changing the gift and estate tax treatment of grantor trusts, GRATs, and GST trusts.
Your exemption amount could be reduced before the 2026 scheduled sunset reduction of the exclusion. By planning in early 2020, you may be able to implement planning options that could mitigate these proposed changes. Please consider revised planning options now before a Democratic proposal becomes law.
Please contact your estate planning attorney to set up a planning session early this year to consider the potential impact to your gift and estate planning goals. We are happy to sit with your existing estate planning team members and/or help you add missing team players.
Be proactive and do not wait until it is too late. These and many other changes should be examined while there is still time to act.