We live in a dynamic world where trends are bound to rise and fall. When we talk about financial trends, people envision the stock market or perhaps their investment portfolio. For estate planning attorneys, the goal is always to maximize assets that are passed on to their heirs. If you’re curious to learn about these emerging financial trends, by all means, read on.
Most people are wondering if there will be a change to the federal estate and gift tax exemption in 2021, and it all depends on the administration of the new government. However, it seems a couple of other things are taking the spotlight, like beating the pandemic, tackling unemployment and economic recovery. We’re hopeful and will keep monitoring for any development. But an ideal change could potentially be deferred until 2022.
One of the impacts of COVID-19 was crippling the economy, and it is uncertain when the economy might pick up again. However, many are afraid that this might lead to tax revenue being raised. Many expect Connecticut to dip its hands into a "rainy day" fund to offset some deficits incurred by the pandemic.
According to a recent report by the Connecticut Office of Legislative Research, they are likely to consider some proposals that could replace the revenue lost, and one of these proposals could include postponing or the reversal of tax policy. For the moment, there is no recorded change yet.
Another financial trend that could affect estate planning is the ongoing low interest rate. Some economists are speculating inflationary pressure. However, there is no empirical proof that shows that the interest rate will rise in 2021. It presents estate planning opportunities to taxpayers, and this trend is most likely to proceed till 2022.
To families who have their properties in several states, federal estate planning will no longer be an option. It is because state estate and inheritance taxes are now entering the spotlight. In some states in the US, the exemption is as slow as $1 million, while state estate rates are over 16%. If you think about it, a $10 million estate will pay no dime to any federal estate taxes, but pay over $1.44 million to state estate taxes.
Every year, trends are what we look for to better prepare for the inevitable. If you’re yet to update your estate plan, you should hire an experienced attorney. They will help you consider the current trend and analyze opportunities that you can leverage. If that sounds good, take a minute to give us a call 718-667-1301 or fill the contact form.
