New York Estate Planning & Elder Law Blog
It is difficult to perform estate planning without taking finances and taxes into consideration. Instead, many people who perform successful planning discover that these three topics are interchangeably related. In the last year, several new topics have been introduced that redefine how each of these three areas.
This article takes a brief look at some new and exciting estate planning strategies.
# 1 – Upstream Gifting
Many estate planning situations involve considering the financial and tax implications. The current estate tax exemption is currently (and temporarily) at $11.4 million per individual. This increased threshold has led to many estate planning experts utilizing new strategies, which includes gifting upstreaming.
This occurs when a person gifts assets “upstream” to parents, which can be utilized for the tax advantage of parents. For example, to take a son with substantial assets might make a gift to his father to take advantage of tax benefits.
# 2 – Increased Longevity Has Created New Planning Considerations
When it comes to preparing a financial plan, life expectancy is often influential in deciding what estate planning tools should be utilized and how assets should be transferred. A growing number of people in the United States are living longer than they previously did. Current statistics suggest that the life expectancy of someone born in 2007 is 103.
Increased longevity has led to several new estate planning considerations. For one, a person might now be required to live off retirement savings longer. These changes must be addressed in estate planning.
# 3 – Opportunity Zone Investing
The Tax Cuts and Jobs Act of 2017 introduced many changes to estate planning law. One of the areas that has received growing attention is the Invest in Opportunity Act, which provides real estate investors with the opportunity to invest in “opportunity zones” in a manner that offers substantial tax savings.
This program provides economic advantages for investment in zones that are determined to be distressed. If you are in a period of deciding how to allocate assets, now might be the time to look into opportunity zone investing.
# 4 – Take Advantage of Interest Rate Sensitive Opportunities
On a monthly service, the Internal Revenue Service published interest rates that can be used in connection with income or gift planning. Referred to as Applicable Federal Rates (AFR), these rates reached a low point years ago and have been slowly increasing ever since. Clients who benefit from estate planning strategies that use low-interest rates should consider utilizing these strategies before the AFR increases any more.
If a person used these strategies when the AFR was higher, now might be the time to determine if the current AFR could improve their plans.
Speak with an Estate Planning Lawyer
One of the best ways to stay up to date with the most current topics and strategies in estate planning is to retain the assistance of an experienced estate planning lawyer. Contact Ettinger Estate Planning today to schedule a free initial consultation.