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Why it is critical to consider using the Enhanced Wealth Transfer Exemptions now.

Posted by Grover Peters | Aug 31, 2020 | 0 Comments

The Tax Cuts and Job Act (TCJA) of 2017 increased the gift, estate and generation-skipping transfer tax exemptions to $10 million (which is inflation adjusted and is now $11,580,000). They are scheduled to be cut in half beginning after 2025. Perhaps, they will be reduced to significantly lower levels depending upon the outcome of the November elections. Democratic proposals have included a gift tax exemption of only $1 million and an estate tax exemption of $3.5 million. They have also proposed other significant changes including causing grantor trusts to be included in the gross estate of the grantor and to requiring GRATs to have a minimum (taxable) remainder of 25% of the value of the assets contributed to the trust. Moreover, many common discounts in valuation would be eliminated.

We assist our clients in Washington State and New Mexico answer questions and plan accordingly to take advantage of the Enhanced Wealth transfer exemptions.

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