The current federal estate and gift tax laws are the most favorable they have been in years. However, depending on the outcome of the November elections, this may change as soon as January 1, 2021. Based on your personal objectives and income needs, you may want to consider available planning opportunities before year-end.
Some of the potential changes include:
To take advantage of the current low interest rate environment and the favorable federal estate and gift tax laws, opportunities to consider include, but are not limited to, Spousal Limited Access Trusts (SLATs - where assets are excluded from your estate but your spouse has access to the assets during his or her lifetime), inter-family loans, Generation Skipping or Dynasty Trusts, Installment Sales to Defective Trusts, and outright gifts.
However, time is of the essence as the year-end is rapidly approaching. Attorneys will need time to draft any needed documents. Appraisers may need to be hired to value assets. Approval may be needed from co-owners to transfer business interests to trusts or individuals. If you wait until the last minute, professionals may not have the capacity to get everything done and implemented before year-end. Now may also be a good time to review your existing estate plan documents to make sure they are still meeting your objectives in light of the potential changes.