Four Property Planning Strategies To Contemplate Throughout The Covid-19 Pandemic – New York Property Planning Lawyer Weblog – Mar 18, 2021
The pandemic has posed great challenges for many people and disrupted countless facets of everyday life. However, low interest rates and depressed assets have created an ideal situation for estate planning. If you are interested in future planning, there are some unique estate planning strategies that you should consider. This article describes just some of the potentially most helpful techniques to consider during the Covid-19 pandemic.
# 1 – Annual Gift Tax Exclusions
This quantity refers to the amount a person can give away each year without tax. Currently, a person can give $ 15,000 in assets tax-free to anyone in one year. This amount refers to how much can be given to one person, which means that one person can give an unlimited number of gifts below that amount to different people without being taxable.
Due to the Covid-19 pandemic, various assets are currently at all-time lows. If you pass these assets on now while their value is comparatively low, you can pay the lowest possible tax on such a transfer. As the value of these assets increases and returns to its previous value, your beneficiary can get the most out of the asset.
# 2 – Charitable Lead Annuity Trusts
These trusts offer annual or routine payouts to a specific charity over a period of time. At the end of this distribution, the remaining wealth is distributed to specific beneficiaries such as children. These trusts can be structured with little or no gift tax impact and often benefit not only the charity receiving the organization, but also the named beneficiary.
# 3 – Donation Interest
The pandemic has made interest in a company, limited company, or partner an attractive option. Given that businesses or other assets may be affected by various changes brought about by the Covid-19 pandemic, giving interest and other assets at lower values can help maximize the assets transferred.
# 4 – Grantor Retained Annuity Trusts
These trusts often hold assets that are expected to increase in value over time. The person transferring the asset will receive an annuity over a period of time. These trusts are often structured so that there are no gift tax consequences and anything that remains in the trust above the 7520 rate passes to the beneficiary.
# 5 – intrafamily loans
Loans can be given to children or other family members at a low interest rate. Often times, when assets that were later purchased with funds from the loan are in value greater than the interest rate, the excess over the interest rate is tax-free. Combined with the gift tax exemptions, these assets can be used to extend a loan over time. If you have an existing family loan, the current low interest rate means that on an existing intra-family loan, it may be time to refinance the amount at a lower interest rate.
Talk to an experienced estate planning attorney
It is not easy to decide which estate planning strategies are best for you. If you need help steering this process, don’t hesitate to speak to a knowledgeable estate planning attorney. Contact Law firm Ettinger today to schedule a free case assessment.