Potential benefits for changing an estate plan before 2021

| Sep 15, 2020 | Estate Planning

To say the least, 2020 has been a challenging year for most Americans. In addition to the pandemic, a contentious presidential election has contributed to a turbulent time. The outcome of the election may also have a direct impact on your estate.

That’s why it’s essential to review your estate planning documents now and take advantage of the current environment to protect your assets in case policies change. An experienced estate planning attorney can help you devise a plan.

Three strategies to consider

High-net-worth individuals, whose estates contain between $10 million and $20 million, can take advantage of current laws to reduce taxes and maximize wealth by weighing these moves:

Strategy #1: Avoiding taxes while maintaining access to assets and benefitting from their appreciation:

  • SLAT: Spousal Lifetime Access Trust
  • BDIT: Beneficiary Defective Inheritor’s Trust

Strategy #2: Transfer assets and appreciation to future generations:

  • GRAT: Grantor Retained Annuity Trust
  • Gift or sale of an interest in family partnerships

Strategy #3: Charitable donations AND benefitting heirs or grantors:

Your estate planning attorney can explain which of these vehicles best fits your goals.

Transfer tax exemption

Perhaps the most significant opportunity for high-net-worth individuals is gifting $11.58 million to another individual without paying a transfer tax. This exemption is more than twice what it was in 2016. While this exception expires in 2026, that could change depending upon the election’s outcome.

Match your strategy with your goals

Estate planning is a highly specialized service, and every person’s needs are different. Working with a knowledgeable lawyer is essential to ensure that your basic needs are covered while your long-term goals and strategies are compatible.