By: Jacquelyn Gutc

In our latest podcast “Breaking Upward,” Beth Andersen and DeDe Jones, CPA and certified financial planner, discuss trusts, estate planning and CRITICAL PROPOSED CHANGES to federal estate and gift tax law, which may affect you. 

Proposed tax changes working their way through the legislature would cut exemptions for the wealthiest taxpayers to about $6 million for individuals and $11 million for couples, reverting it back to where it was pre-2017.

In addition, the new tax plan would usher in drastic changes to grantor trusts. Grantor trust is an umbrella term for a variety of trusts, including irrevocable life insurance trusts (ILITs), spousal lifetime access trusts (SLATs), intentionally defective grantor trusts and grantor retained annuity trusts.

“All of those trust strategies are on the chopping block right now,” DeDe said. “This isn’t a common strategy, but it’s a popular strategy if you are looking to be subject to estate taxes.”

Under the proposed tax plan, a grantor trust will be included in the grantor’s estate when they die. In addition, distributions from grantor’s trusts will be subject to a gift tax and sales between the grantor and the trust will be fully taxable.

“There won’t be an ability to add money to existing grantor trusts without jumping through a number of hoops,” DeDe said.

Both DeDe and Beth recommend that if you think the proposed tax changes might affect you, you should contact your attorney to take advantage of current law as soon as possible. They expect tax law changes to go into effect in December or January 2022.

“If it affects you, don’t delay,” DeDe said.

While it’s critical to have the best team of attorney, tax accountant and CPA to help you protect your wealth, it’s important that to recognize that tax laws change all the time and it falls on you to be in contact with your wealth management team to ensure that your finances and estate are protected regardless of policy changes.

Get more details on the key estate planning documents you likely need, grantor trusts and more in this episode of “Breaking Upward.” 

For questions on your own estate planning and how the proposed estate taxes may affect you, contact Andersen Law PC for a free consult.


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