On January 1 of each year, the estate and gift tax “basic exclusion amount,” currently $12,920,000 per person, is adjusted for inflation. The 2024 inflation adjustment, which will be based on data gathered through August 31 of this year, will be announced this fall. But because the inflation adjustment incorporates data going back to September 2021, it is possible to project the 2024 inflation adjustment now with some precision. The adjustment will be approximately $740,000. The size of the 2025 inflation adjustment will depend on the course of inflation over the next year, but $500,000 is a reasonable guess based on currently available data and the continued inflationary pressures in the American economy. The gift tax annual exclusion will jump to $18,000 in 2024 and […]
Continue readingAuthor Archives: GaryLaw
Latest News on Proposed Legislation is Good
A few days ago, the current version of the Build Back Better Act (all 1684 pages) was released, and it had some new provisions for a surtax on very large incomes, including income from trusts and estates. So far, there is no mention of the reinstatement of the income tax deduction for state and local taxes–an important issue for New York residents. However the good news was that previously threatened and dire changes to the estate and gift tax laws, and certain related income tax benefits, were NOT included, and therefore unlikely to be part of the final package (if any) which may be passed this year. So, we most likely do NOT have to deal with increases in personal income tax and capital gain […]
Continue readingCOVID-19 and Personal Bankruptcy for Small Business Owners
Our Clients generally are not needful of this relief, or appropriate candidates for it—but we felt this is very important for the community to know, and to pass on. I have a long relationship with Andy, and consider him a wonderful resource. 4/16/2020 Author: Andrew M. Thaler Esq. Most small business owners unavoidably have to either incur business debt in their own name (think of an American Express Card) or personally guarantee business debt. The Coronavirus has had a devastating effect on small business. Many small businesses will simply not be able to weather the storm and survive. In this scenario, an inability of non-operating companies to pay its debts will leave small business owners with personal liability on business debt. Now is the time […]
Continue readingNYS Temporarily Allows Virtual Witnessing of Wills, Health Care Proxies and Powers of Attorney
From the NY State Bar Association Today: Gov. Andrew Cuomo issued a new executive order Tuesday that addresses remote witnessing. The order, among other issues, clarifies the requirements needed to allow the remote signings of such documents as deeds, wills, powers of attorney forms and healthcare proxies. The order states that the law authorizes the use of audio and video technology if the following conditions are met: • The person requesting that his or her signature be witnessed, if not personally known to the witness(es), must present valid photo ID to the witness(es) during the video conference, not merely transmit it prior to or after; • The video conference must allow for direct interaction between the person and the witness(es), and the supervising attorney, if […]
Continue readingDeferrals of Insurance Premium Payments in NYS
From the NYS Dept of Financial Services— Regulations will be issued in the near future allowing consumers and small businesses experiencing financial hardship due to COVID-19 to defer paying health insurance premiums through June 1, 2020. Details will be available once the regulation has been issued. Consumers experiencing financial hardship due to COVID-19 may defer paying life insurance premiums for 90 days. Consumers and small businesses experiencing financial hardship due to COVID-19 may defer paying premiums for property and casualty insurance for 60 days Premium finance agencies are required to provide same relief as insurers.
Continue readingObservations on Life Insurance Companies and Products
I saw this list (excerpted) of observations from a Life Insurance sales person, and it is worth looking at, keeping in mind the sales oriented goals: Will Life Insurance Policies Pay Out on Death from a Pandemic? Individual life insurance policies DO NOT EXCLUDE deaths from a pandemic. Some Employer provided life insurance policies MAY EXCLUDE pandemics, war and terrorism. How Will Insurers’ Financial Health Be Impacted By The Corona Virus? Life insurance company portfolios are actually impacted negatively due to increased Death claims from the coronavirus but are positively impacted from the elimination of annuity payouts on the death of annuitants. Are Life Insurers Still Able to Conduct Physicals for New Policies? YES. And, Some companies have Eliminated the need for Physicals for […]
Continue readingCongress Waives Required Minimum Distribution Rules
The changes are coming fast and furious. The CARES Act ( the “Act”) waives the required minimum distribution rules for certain defined contribution plans and IRAs for calendar year 2020. This provision provides relief to individuals otherwise required to withdraw funds from such retirement accounts. If an individual has taken their RMD, they can redeposit it if sixty days have not elapsed since the date of the distribution. Hardship IRA/401(k) Withdrawals for Younger Participants The Act will allow coronavirus related withdrawals from their 401(k) and IRA accounts up to $100,000 during 2020 and avoid the normal 10% penalty for those not of the required minimum age of 59.5. Reasons for Coronavirus related withdrawals include (1) An account owner diagnosed with COVID-19, or (2) A spouse […]
Continue readingVirtual Notary Now in New York by Gov. Cuomo’s Executive Order
Great News for those of us trying to help our clients stay safe, Effective March 19th: New York Governor Andrew Cuomo signed an executive order allowing for documents to be notarized virtually using audio-video technology, which those in the real estate industry say is a necessary step to keep business moving during the COVID-19 pandemic. As part of the executive order, Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency, any “notarial act that is required under New York State law” is allowed to be performed using audio-video technology if the person seeking the notary’s services, if not personally known to the notary, presents valid photo ID to the notary during the video conference. According to the executive order, the notary and […]
Continue readingPlanning in a Disaster
We appear to be entering a new and terrible phase of this nightmare, where access to adequate health care becomes impossible in an overloaded system. Our dread and anxiety become compounded by uncertainty about how long this phase could continue–hopefully just weeks, and not (many) months. Many of our friends, neighbors and our clients have the resources to withstand the loss of work, business, and income. The sadness we feel for those who do not is a hard burden to bear, and we hope you all find ways to help and support those whose families are truly upended and ruined. It is difficult to think that beyond our own communities, lay even more vulnerable populations, in dense Brazilian Favelas, slums in India, or overcrowded refugee […]
Continue readingUnfortunately, Estate Planning Must take Political Considerations in Account in 2019
In recent decades, phased in changes to estate tax exemptions, and unexpected surprises which dramatically changed rates and exemptions have made estate tax planning more difficult and complicated. Despite the changes, the underlying strategies remained similar over the last fifty years, using tried and true techniques built on rulings and loopholes inhabited by tax lawyers and advisors who were intent on keeping their client’s wealth intact for future generations. Those strategies are now threatened, and the time to use them may be running out. The “sunset” of the current generous estate tax Exemption of $11.4 million (after indexing annually for inflation) in 2026 presents a huge challenge. The Exemption declines back to the 2011 level of $5 million (before annual inflation adjustments are included). State […]
Continue reading