Newsletters

2024 ESTATE PLANNING UPDATE

As part of our firm’s ongoing commitment to notify our clients of changes in the tax laws, please be advised of the following federal legislation effective January 1, 2024:

 

Federal Law Updates

  • The annual gift tax exclusion amount will increase to $18,000 per year per donee or $36,000 per donee if gift-splitting with your spouse.  As in prior years, there is an unlimited exclusion for payments of tuition and medical expenses.

  • The Federal Estate and Gift Tax Exemption is adjusted for inflation annually and will therefore be increased to $13,610,000.

  • The Generation Skipping Transfer Tax Exemption will also increase to $13,610,000.

    Maryland Law Updates

  • The Maryland Estate Tax Exemption remains at $5,000,000. Maryland estate tax returns filed for portability purposes may now be filed up to five years from the date of death of the predeceased spouse.  This applies retroactively to decedents dying on or after January 1, 2019.

  • Maryland recently updated its statutory Power of Attorney form to include additional provisions.  The new form contains language allowing an agent to appoint a successor agent, as well as provisions regarding compensation to the agent, joint accounts and a gifting section.

  • Unmarried adults may register as domestic partners by filing a Declaration of Domestic Partnership with the Register of Wills.  Domestic partners will be exempt from inheritance tax.

If you would like to discuss the impact of these changes upon your current estate plan, or if you have any questions concerning the above, please call our office to schedule an appointment.

2023 ESTATE PLANNING UPDATE

As part of our firm’s ongoing commitment to notify our clients of changes in the tax laws, please be advised of the following federal legislation effective January 1, 2023:

  •  The annual gift tax exclusion amount increased to $17,000 per year per  donee or $34,000 per donee if gift-splitting with your spouse. As in prior years, there is an unlimited exclusion for payments of tuition and medical expenses.  .

  •  The Federal Estate and Gift Tax Exemption is adjusted for inflation annually and was therefore increased to $12,920,000.

  •  The Generation Skipping Transfer Tax Exemption also increased to $12,920,000.

  •  The Maryland Estate Tax Exemption remains at $5,000,000.

2022 ESTATE PLANNING UPDATE

As part of our firm’s ongoing commitment to notify our clients of changes in the tax laws, please be advised of the following federal legislation effective January 1, 2022:

  •  The annual gift tax exclusion amount increased to $16,000 per year per donee or $32,000 per donee if gift-splitting with your spouse. As in prior years, there is an unlimited exclusion for payments of tuition and medical expenses.

  •  The Federal Estate and Gift Tax Exemption is adjusted for inflation annually and was therefore increased to $12,060,000.

  •  The Generation Skipping Transfer Tax Exemption also increased to $12,060,000.

  •  The Maryland Estate Tax Exemption remains at $5,000,000.

2020 ESTATE PLANNING UPDATE

As part of our firm’s ongoing commitment to notify our clients of changes in the tax laws, please be advised of the following federal legislation effective January 1, 2020:

  • The Federal Estate and Gift Tax Exemption is adjusted for inflation annually and was therefore increased to $11,580,000.

  • The Generation Skipping Transfer Tax Exemption also increased to $11,580,000.

  •  The Maryland Estate Tax Exemption remains at $5,000,000.

  • The annual gift tax exclusion amount remains at $15,000 per person per calendar year.  Therefore, it is essential that taxable gifts be properly planned and documented.

  • On December 20, 2019, President Trump signed into law the Setting Every Community Up for Retirement Enhancement Act (“Secure Act”).  The Secure Act, which changes the rules regarding both contributions to and distributions from retirement accounts, is effective January 1, 2020 and will not be applied retroactively.  The good news is that the Secure Act removed the age restrictions for contributions to a traditional IRA or 401(k) and increased the age for Required Minimum Distributions (RMDs) from 70 ½ to 72.  The bad news is that the Secure Act practically eliminates the “stretch IRAs” which calculate the RMDs based on the life expectancy of the beneficiary.  There are a few exceptions: surviving spouses, minor children of the retirement account holder until they attain the age of majority, a chronically ill or disabled beneficiary, and a beneficiary who is less than 10 years younger than the decedent.  All other beneficiaries will be required to withdraw the balance of all retirement accounts within 10 years of the account owner’s death. 

2019 ESTATE AND GIFT TAX UPDATE

  • As part of our firm’s ongoing commitment to notify our clients of pertinent changes in the law, we want to explain how recent Maryland and federal legislation may impact your estate plan.

  • The Federal Estate and Gift Tax Exemption is adjusted for inflation annually and was therefore increased to $11,400,000.

  • The Generation Skipping Transfer Tax Exemption also increased to $11,400,000.

  •  The Maryland Estate Tax Exemption was scheduled to be increased from $4,000,000 to the same amount as the Federal Estate Tax Exemption.  However, Maryland passed a law freezing the Maryland Estate Tax Exemption at $5,000,000 effective January 1, 2019.  The Maryland Estate Tax Exemption is NOT indexed for inflation and will not be increased each year.

  • While Maryland estate tax laws are no longer in sync with Federal estate tax laws, Maryland adopted the “portability” provisions of the Federal law.  This means that in certain circumstances, a surviving spouse can elect to preserve the unused portion of his or her decedent spouse’s Maryland Estate Tax Exemption.

  • Unlike the federal government, Maryland does not impose a gift tax.