Author: Shine Lin

Milton Law Group > Articles posted by Shine Lin

Proposed Spending Bill: The Good, the Bad, and the Ugly Effects on Estate Planning

The "Infrastructure Financing and Community Development" bill making its way through Congress seeks to reduce the lifetime Estate and Gift tax exclusionary amount from $11.7 million to $5 million and to attack the grantor trust type of arrangements. That’s the bad.  The good news is that some other provisions thought to be included in the Infrastructure Financing and Community Development bill were excluded, including:  Capital gains tax on death: earlier proposals suggested that to receive a step up in basis on appreciated assets, the donor would have had to pay the capital gains tax on the appreciation of the assets held by the donor at death.   Capital gains tax on transfers to trusts: taxing the built-in...

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Proposed Tax Law Changes: Grantor Trusts and Gifts to Irrevocable Trusts

Grantor trusts have been a key tool for estate planning attorneys to reduce the taxable estate of high net worth individuals, but a new bill could drastically change this existing wealth transfer strategy.  On Sept. 15, 2021, the House Ways and Means Committee introduced a new "Infrastructure Financing and Community Development" bill that proposes to include assets transferred to grantor trusts (trusts that are not treated as separate from the donor/grantor for income tax purposes because the donor/grantor pays the income tax owed by the trust, but are separate entities for estate tax purposes) in the estate of the grantor/donor.  This bill attacks estate freezing and estate reduction techniques that estate planning attorneys have utilized in the past, such as gifts...

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New Bill Could Have Drastic Changes to Estate and Gift Tax Exemptions

A new bill working its way through Congress could change current estate planning rules and dramatically shift estate planning standards as early as Jan. 1, 2022.   On Sept. 15, 2021, the House Ways and Means Committee introduced a new bill titled "Infrastructure Financing and Community Development" that would, among many other changes, reduce the increased Estate Tax and Gift Tax Exemption to half of the exemption allowed in the 2017 Tax Cut and Jobs Act ("TCJA").   The proposed bill would decrease the existing Estate and Gift Tax exemption amount from $10 million to approximately $5 million effective Jan. 1, 2022, rather than Jan. 1, 2026, which was the existing date the TCJA exemption was set to sunset.   The change in date to four years earlier than the previously planned reduction of the Estate and...

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