At the end of the month, we like to survey the elder law landscape and share news and notable developments, and sometimes something that’s just interesting to read. For the March review, we have taxes and Britney and a good read.
March Review of Estate Tax News
The liberal Democrats have put a tax plan on the table, including dramatic changes in the estate tax. Bernie Sanders, who’s Senate Budget Committee chair, introduced a tax bill that drops the exemption to $3.5 million (it’s now $11.7 million), $7 million for couples. Tax rates would be: $3.5 million-$10 million 45%; $10 million-$50 million, 50%; $50 million-$1 billion, 55%; and $1 billion-plus, 65%. Yet the plan summary asserts: “99.5% of Americans would not see their taxes go up by one penny.”
At least one wealthy person is on board with the Sanders plan, Abigail Disney.
Experts point out that the estate tax rate isn’t the big worry for most people. What is? Elimination of the basis adjustment, or ‘step up,’ at death.
Planning in Uncertain Times
With all this uncertainty, many may be tempted to wait and see, but that’s not the best idea. There are opportunities with the currently high exemption that will disappear, lock them in before it’s too late and consider various options to avoid or pay tax that could come due after your death.
It’s normal for anyone embarking on an estate plan to wonder whether they really need an attorney. We would say almost everyone should use an attorney, and here’s why.
It’s also normal for anyone embarking on an estate plan to worry about what that attorney is going to cost. This article attempts to break it down.
LegalZoom gathered up estate planning statistics. While planning has increased during the pandemic, it’s still estimated that nearly 70% have no plan.
March Review of Celebrity Estates
Britney Spears isn’t free, but she’s asserting herself. The pop star has filed to have her dad, Jamie, removed as her personal conservator (what we would call a guardian in Arizona). She apparently did not file to remove him as conservator of her finances, where he serves along with a financial institution, Bessemer Trust. Spears’ conservatorship is voluntary, and she reserves the right to terminate it at any time.
Aretha Franklin’s estate is back in the news. It looks like the estate has reached a deal with the IRS over income tax the Queen of Soul never paid And yet more documents that could be construed as her will have surfaced.
Tips and Tidbits
Tips for . . .
. . . protecting retirement savings, five easy ones.
. . . keeping caregivers from ripping off aging loved ones.
. . . dealing with trusts that hold inherited IRAs
. . . and understanding your options if you hold one.
Want to be cremated like a Viking? You might be able to soon in Maine.
What’s an interpleader?
What’s a QLAC and do you need one to help with your RMDs?
Want more to read? Investopedia selected the best estate planning books for 2021.
Plus here are two articles about how a bequest can change everything . . . for a charity like the Cedar Rapids Public Library ($1 miliion is a lot!) and for ordinary people, explored in a Vox piece titled “The Impact of Inheritance: A ‘Great Wealth Transfer’ May Be on the Horizon. Will a Gift from Grandma Save the Middle Class?” It’s our “good read” pick. As the piece says, “Inheritance is a tricky thing to talk about, a subject that wraps up money, family, and death in one impossible package. For those who receive it, or stand to, it’s wealth that comes at a terrible moment; a boon and bureaucratic puzzle; and a reminder of someone you lost.” Though the piece ends up being a commentary on wealth inequality, that’s not the good part. Rather, it’s hearing people talk about loss and gain and the ways both affect them.
That’s it for the March review.