Bock, Goffe and Karr Discuss What You Need to Know to Take Advantage of the Federal Gift Tax Exemption

Estate planning attorneys Susan Bock, Wendy Goffe and Emily Karr contributed an article to the Puget Sound Business Journal titled “Opinion: Is now the time to make a large gift?,” published March 6, 2021. The authors discuss the ways in which the current federal estate, gift, and generation-skipping transfer tax exemptions, which were doubled temporarily by the Tax Cuts and Jobs Act of 2017, may be vulnerable to reductions under the new administration.

President Biden has signaled his interest in making changes to tax laws that would, in part, decrease the amount of the exemptions and possibly increase the estate and gift tax from 40% to 45%. Treasury Secretary Janet Yellen, however, has expressed that an economic stimulus package for pandemic relief should be prioritized ahead of tax law changes, potentially giving individuals time to alter their estate plans.

The authors offer a caveat: “Although many high-net-worth individuals are contemplating additional planning in 2021 to use more or all of their remaining estate and gift tax exemptions before a potential reduction in those exemption amounts, one reason to proceed with some amount of caution is the possibility that any change to these tax regimes may be retroactive to Jan. 1, 2021.”