May roundup

May Roundup: Anticipating the Unknown

We’re kicking off the new month with a look back at the last one; here’s the May roundup of elder law items:

Will Corona Kill the Ultra-High Estate Tax Exemption?

We aim to keep this a Coronavirus-free zone, but we can’t help but wonder whether current events will have an effect on estate and gift tax laws. Both the levels of government spending and the increasingly obvious economic inequities suggest change may lie ahead. We’re not alone. This opinion piece from MarketWatch summed up it up well: “There’s no guarantee that today’s ultra-favorable federal gift and estate tax regime will be allowed to survive past this year. In fact, there’s no guarantee that the regime for this year (2020) won’t be retroactively changed for the worse after the November election. That probably won’t happen, but don’t bet your life on it.” Before getting to that statement, the piece reviews how estate and gift tax laws have changed in the recent past. And after that statement, it discusses some strategies for taking advantage of the current landscape. If you are not ready to act now, consider exploring your options and preparing to before it’s too late.

Speaking of exploring options, the current economic climate (low interest rates, depressed assets) provides an historic opportunity to pass wealth onto younger generations.

Another Corona-related issue: What do you do if you received a stimulus check for a dead person? The answer.

Estate Planning Roundup

  • One really good idea surfaced thanks to the virus crisis: Assemble an estate planning “to go” package that’s ready for any emergency.
  • You may have heard that the “stretch IRA” is gone. That’s mostly true, but not entirely. If a person inherits a traditional IRA now, there are new rules. One option: if you don’t want your beneficiaries to have to make those choices, convert to a Roth. Is the time right for you? Did you know that the suspension of RMDs helps make this a good time?
  • People who have kids almost always leave assets to them in equal shares, but there are times when they seriously consider whether that’s really fair. For anyone struggling with the issue, here are some suggestions. One of them: talk to your kids about it.

Slayer Can Inherit, Save Tax

One of the most interesting elder law stories this month came out of the U.K. A court found that Sally Challen, a woman who beat her husband to death with a hammer after decades of abuse, could inherit from his estate. She was jailed for life and removed as an heir by laws that prevent criminals from benefiting from their crimes. Most U.S. states, including Arizona, have similar “slayer statutes.” (Arizona disinherits felonious, intentional killers.)  In Sally’s case, evidence of mental illness reduced her charges and resulted in her release. It that’s not interesting enough, the inheritance fight wasn’t to sustain her livelihood; she’s not taking it. It’s to save inheritance tax for her two sons.

That’s it for the May roundup. Keep your distance, but don’t be a stranger.

Leave a Comment

Your email address will not be published.

Scroll to Top