At this week’s 52nd Annual Heckerling Institute on Estate Planning, more than 3300 estate planning professionals from across the country gathered for education and collegiality, with a special focus this year on nailing down the nuances of the new tax law as it affects clients. A more detailed look will be forthcoming in our client quarterly newsletter, but in the meantime we wanted to take this opportunity to pass along some preliminary highlights:
- There is a new estate, gift and generation-skipping transfer tax exemption amount of $11.2M per person.
- With portability, a married couple can now transfer approximately $22.4M not only at death but also during life without paying transfer taxes.
- The annual gift tax exclusion has been adjusted from $14k to $15k for 2018.
- Now more than ever, with this change in the federal law, there is a potential to shield $22.4M from Massachusetts estate taxes (be careful of transferring low basis assets) using a Massachusetts Standby Gifting Trust even if done just prior to death.
- The corporate tax rate for C-Corporations have been reduced from 35% to 21% and pass through entities also will receive a tax deduction subject to certain limitations.
- As the estate tax exemption increases, more attention should be paid to how best to increase basis in assets during life and after death in order to reduce capital gain tax liability.
In addition to education, the conference also provides an opportunity to interact with many exhibitors. Among the most interesting to Vinnie is an app for snowbirds that tracks the number of days spent in Florida for residency purposes; as well as an online service that allows clients to digitally organize and allocate distributions of tangible personal property. We will be testing both of these services out in the coming weeks and will pass along more information to our clients if we find them to be valuable.
Although we are enjoying the warm weather in Florida and have enjoyed reconnecting with friends and colleagues, we look forward to returning and explaining in greater detail the highlights of the new tax bill, including how the decrease in corporate tax rates affect different types of corporations.