Recent Developments Within Estate Planning

On Monday, May 3, the 55th Annual Heckerling Institute on Estate Planning kicked off. This was the first virtual Institute; the technology worked well and the speakers seamlessly presented to their audience as if we were all together in one venue.

Steve Akers of Bessemer Trust, Sam Donaldson from the Georgia State University College of Law, and Sarah Johnson of Birchstone Moore LLC presented “Recent Developments 2020/2021.” They began by touching on some of the CARES Act provisions that have been extended, including the $300 charitable deduction for non-itemizers through 2021 and the increased deduction to $600 for joint filers in 2021.

They then discussed Senator Sanders’ recent legislative proposal, “For the 99.5 Percent Act,” which would be an estate planner’s nightmare. The proposal includes the following: (1) increasing the top estate tax rate anywhere from 45%-65% depending upon the size of the decedent’s estate; (2) reducing the estate tax exclusion to $3.5 million and the gift tax exclusion to $1 million, not indexed for inflation; (3) curtailing valuation discounts; (4) requiring GRATs to have a minimum ten-year term and a remainder interest with a value equal to the greater of 25% of the property it receives or $500,000; (5) including all grantor trusts in the grantor’s estate; (6) limiting GST protection for trusts to 50 years; and (6) limiting the annual gift tax exclusion to $30,000 for gifts in trust and for gifts of interests in pass-through entities. Senator Sanders’ proposal is all about transfer taxes.  

The presenters mentioned other proposed legislation involving income tax that would increase a wealthy person’s tax at death. One proposal would treat property transferred by gift or at death as sold and yet another would eliminate the step-up in basis rule at death.

The presenters then discussed numerous cases and rulings that have been issued over the last year.  These dealt with valuation challenges, charitable gifts, ING trusts, decantings, conservation easements, and self-dealing in the context of private foundations, among many other issues.

And for more coverage of the 2021 Heckerling Institute on Estate Planning, please also see:

• Recent Developments Within Estate Planning
• Can a CRT Stretch an Inherited IRA?
• Strategic Estate Planning for Another Year of Change
• The Generation-Skipping Transfer Tax