Three Property Planning Methods In Planning 2021 – New York Property Planning Lawyer Weblog – Dec 28, 2020
Unfortunately, there is no one size fits all estate plan. This couldn’t be truer in a year where there are a lot of uncertainties about the future. The Covid-19 pandemic has changed our lives in myriad ways, including growing concerns about end-of-life problems. As a result, there are some helpful estate planning strategies in early 2021 that you should be able to implement.
# 1 – Grantor Retained Annuity Trusts
The grantor kept pension foundations are financial instruments used as part of the estate planning process to both lower taxes on large financial gifts to loved ones. In accordance with these trusts, a person transfers property to an irrevocable trust for a period of time in exchange for annual annuity payments. At the end of the trust period, a beneficiary receives the remaining assets. Because interest rates are currently low, there is an increased likelihood that the amount given to the beneficiary will exceed the calculated amount of the gifts, which allows assets to be given to family members without being subject to gift taxes.
# 2 – Intra-family loans
Another wealthy technique that has been used successfully by many people is intra-family loans, most commonly given between parents to children or grandchildren. Usually these loans are based on that Applicable federal rateThis is the lowest interest rate that can be charged on a loan so it is not considered a gift. These loans provide families with a method to transfer growth to their wealth without giving direct gifts. These trusts can be particularly useful when the recipient of a loan is starting a business, as the repayment terms have a great deal of discretion.
# 3 – Tax Law Changes
Significant changes to both estate and gift taxes were made in 2018. More recently, Congress passed a bill to significantly change the ways in which income tax deferrals are allowed on inherited retirement accounts. With government stimulus spending as well as the change in political administration in January 2021, it is likely that additional changes to tax laws are approaching and that these changes will not be “friendly” for many taxpayers. For those who create estate plans without considering current or future legislation, new regulations can have undesirable consequences.
Why Estate Planning is Critical
It’s easy to delay estate plans. After all, it is certainly an uncomfortable thought that one day we will no longer exist. Remember, proper estate planning can help make the time leading up to your death less challenging and stressful for loved ones. Proper estate planning also helps ensure that your estate can be processed efficiently and cost-effectively. Estate planning also helps keep your beneficiaries safe from subsequent lawsuits and divorce.
Talk to an experienced estate planning attorney
Deciding which estate planning strategies are best for you can be difficult, but a knowledgeable estate planning attorney can discuss your various options, as well as the strengths and disadvantages of each. If you or a loved one needs the assistance of an experienced accident attorney, please do not hesitate to contact us Law firm Ettinger today.