Utilize Current Tax Laws Before Potential Changes
“If you like the way the laws are today, you need to take advantage of them now, before they are changed tomorrow. In other words, use it or lose it.”
The pundits are saying that the if Democrats win the White House and possibly Congress, expect changes to income, gift generation skipping transfer and estate taxes. This recent article from Forbes, “Use It Or Lose It: Locking In the $11.58 Million Unified Credit” says that the time to act is now.
Expected Tax Law Modifications If Democrats Win
Locking In the $11.58 Million Unified Credit
The Evolution of Estate and Gift Tax Exemptions
Possibility of Tax Law Reversion in 2026
Making Taxable Gifts to Secure Current Tax Laws
Proposed IRS Regulations Protect Prior Taxable Gifts
Benefits of Making Outright Taxable Gifts Now
Ensuring Financial Security Before Gifting
Utilizing Spousal Lifetime Access Trusts (SLATs)
Potential IRS Attention and Legal Considerations
Be mindful that such a trust may draw attention from the IRS, because when two people make gifts to trusts for each other, which leaves each of them in the same economic position, the gifts are ignored and the assets in the trusts are included in their estate.
The courts have ruled, however, that if the trusts are different from each other, based on the provisions in the trusts, state laws and even the timing of the creation and funding of the trusts may be acceptable.
Importance of Proper Administration and Alignment
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