Estate Planning Weekly COVID-19 Update – 11.05.20
This weekly COVID-19 update is brought to you by our Chambliss Estate Planning team. We are sharing articles, legal developments, external resources, and tips for coping during these uncertain times. Each weekly issue will cover various trends of vital interest in the world of estate planning, elder law, and special needs planning. To be added to our email list, please subscribe.
Can You Believe It’s November – 2020 Is Almost Gone…
By: David Hunter
I recently met with two brothers whose sister had died suddenly. Still dealing with their grief, the brothers were further confused by the probate process and how their sister’s estate would ultimately be distributed to them. We discuss
“Lions and tigers and bears” and “winged monkeys” may have been the source of Dorothy Gale’s worries in the “Wizard of Oz.” Even without scary critters or wicked witches, 2020 has had its own sources of concern – impeachment, pandemic, and protest, oh my!
2020 will be behind us before you know it with most folks saying “good riddance.”
As we approach year end, I suggest you consider the following actions:
- Review Estate Planning Documents – Review your existing estate planning documents to make sure they are up-to-date. Estate planning documents are so important that you should review them every so often and immediately after any major life event, including the birth of a child, inheriting a large sum of money, divorce, marriage, etc.
- Noncharitable Giving – Now may be a great time to make gifts that benefit your spouse and descendants. The historically low interest rates and lifetime gift and estate tax exemptions present a powerful estate planning opportunity. Many estate and gift tax strategies hinge on the ability of assets to appreciate faster than the interest rates prescribed by the IRS. In addition, the economic fallout from the pandemic is depressing many asset values. The current gift and estate tax exemptions are set to expire in a few years.
- Charitable Giving – The Tax Cuts and Jobs Act doubled the standard deduction while repealing or limiting many itemized deductions, leaving millions fewer taxpayers claiming actual itemized deductions. Typically, there is no tax benefit for giving to a charity unless you itemize deductions. However, the CARES Act created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. To take advantage of this provision, taxpayers should make sure to donate before the end of the year. Read “Charitable Giving in the Time of COVID-19” for details. Also consider gift-bunching to a donor advised fund (see our December 2018 Estate Planning Essentials article on this topic).
- Consider an Installment Sale to an Irrevocable Grantor Trust – An installment sale to an irrevocable grantor trust can be an effective estate planning strategy to remove assets from your estate while preserving an income stream. When a gift or sale is made to a grantor trust, the grantor still is treated as the owner of the trust’s assets for income tax purposes. The grantor, rather than the trust, pays the tax on the trust’s taxable income, and transactions between the grantor and the trust are not subject to income tax. The appreciation on assets sold to the trust is removed from the grantor’s estate.
- Consider a Roth Individual Retirement Account (IRA) Conversion – 2020 may be a great year to convert your Traditional IRA to a Roth IRA. There is no income limit for converting a Traditional IRA to a Roth IRA. Although a conversion may not be right for everyone, there are several reasons to consider a 2020 Roth IRA conversion, including the risk of higher future income tax rates and recent changes to required minimum distribution rules under the SECURE Act. Roth conversions are permanent, so you should be certain about the decision before making a change.
Estate Planning Resources
IRS Issues Final Regulations for ABLE Accounts
The Internal Revenue Service has issued final regulations covering tax-free savings accounts that allow people with disabilities and their families to save and pay for disability-related expenses without jeopardizing eligibility for Medicaid, Supplemental Security Income, and other government benefits…
Do You Pay Capital Gains Taxes on Property You Inherit?
When you inherit property, such as a house or stocks, the property is usually worth more than it was when the original owner purchased it. If you were to sell the property, there could be huge capital gains taxes. Fortunately, when you inherit property, the property’s tax basis is “stepped up,” which means the basis would be the current value of the property…
A Modest Social Security Increase for 2021
The Social Security Administration has announced a 1.3% rise in benefits in 2021, an increase even smaller than last year’s. Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021…
Also Check Out…
CDC Says Virus Spread Risk Increases at Holiday Celebrations
As many people begin to plan for fall and winter holiday celebrations, the CDC offers the following considerations to help protect individuals and their families, friends, and communities from COVID-19. When planning to host a holiday celebration, you should assess current COVID-19 levels in your community to determine whether to postpone, cancel, or limit the number of attendees. Click here to read more.
Fauci: Early COVID-19 Vaccines Will Only Prevent Symptoms, Not Block the Virus
At least four candidates are near the finish line in the U.S. coronavirus vaccine race. A key point to note is that the vaccine isn’t an end-all solution to the pandemic. That’s in large part because any inoculations developed now are focused on simply preventing symptoms from arising, rather than blocking out the virus altogether. Click here to read more.
France and Germany Thrust into Lockdown as Second COVID-19 Wave Sweeps Europe
French President Emmanuel Macron and German Chancellor Angela Merkel ordered their countries back into lockdown on Wednesday, as a massive second wave of coronavirus infections threatened to overwhelm Europe before the winter. Click here to read more.
2021 Boston Marathon Postponed Amid Pandemic
The 2021 Boston Marathon has been postponed from its traditional date in April until at least the fall of next year amid the coronavirus pandemic, the Boston Athletic Association said. It would be impossible to safely hold the event with just six months left until Patriots’ Day — the date the race is traditionally run — and road races are prohibited until Phase 4 of the state’s reopening plan. Click here to read more.
COVID-19 Racism Takes Toll on Chinese Americans’ Mental Health
Chinese Americans are experiencing more racial discrimination and it appears to be affecting their mental health, according to a convenience sample survey. Slurs perpetuated online, in-person become everyday reality for many families, survey reveals. Click here to read more.
Some COVID-19 “Long Haulers” Experience Lasting Skin Problems
Some patients with COVID-19 have persistent skin-related symptoms long after their initial infection has cleared, according to a new analysis. The findings, presented at the 29th Congress of the European Academy of Dermatology and Venereology by investigators at Massachusetts General Hospital, point to another burden experienced by so-called “long haulers” who get better but don’t seem to fully recover from COVID-19. Click here to read more.
Coping With COVID-19
Action for Happiness November Calendar
Our Chambliss team continues to monitor legal developments in connection with the COVID-19 pandemic. Please contact Jim Catanzaro, Justin Furrow, or your relationship attorney if you have questions or need additional information.