Legislation has been proposed to change the estate, gift and generation-skipping tax system. There are numerous changes that we are anticipating will occur. Although we do not know the exact changes that will occur to the estate, gift and generation-skipping tax system until the law has been signed, it is fair to say that a change is highly likely to happen this year that will impact many tools that previously have been used to reduce estate taxes. To begin with, the “For the 99.5% Act” which was introduced on March 25, 2021, into the US Senate, reduces the amount of… Continue reading

In December 2019, the SECURE Act was passed into law. The SECURE Act became effective on January 1, 2020. The SECURE Act changes how long retirement accounts can be collected for nonspousal beneficiaries. Before the SECURE Act passed, an individual named on a traditional individual retirement account (IRA) or on a ROTH IRA could collect the account over their life expectancy. The SECURE Act now generally provides that the individual would need to collect the IRA or ROTH IRA within 10 years of the account holder’s death. This is significantly shortening the period in which to continue the income tax… Continue reading

A probate can be like a bankruptcy proceeding for a surviving spouse. If the net worth of a decedent and his or her surviving spouse is less than $125,000.00, it is possible to protect part of the estate for the benefit of the surviving spouse or the minor children of the decedent. The process for barring the creditors requires publishing notice to creditors in the newspaper once a week for three weeks. Creditors have the later of four months after Notice to Creditors was originally published or 30 days after they receive actual notice to file a proper creditor claim.… Continue reading

As of January 1, 2020, the amount exempt from federal estate taxes is $11,580,000.00 and the amount exempt from Washington State estate taxes is $2,193,000.00. As the amount exempt from estate taxes continues to increase, and the taxation of trusts becomes more complex, I am suggesting that my clients evaluate the necessity of a trust to avoid estate taxes and consider other changes that might be appropriate for their estate plans. To begin with, should your surviving spouse be named as the personal representative or trustee? I have worked on a number probates where the surviving spouse was not the… Continue reading