For its budget proposal for 2022, the U.S. House Ways and Means Committee proposed amendments to the Internal Revenue Code.
Over the past year, McManus & Associates has shared the dangers of this coming tax legislation impacting families’ efforts to transfer their wealth.
The tax legislation reflects many of the concerns that we have shared over the past year in anticipation of the current Administration’s efforts to enact significant obstacles for affluent families to transfer their wealth effectively.
In addition to the expected reduction of the tax exemption for lifetime gifts and estates, the potential House budget also seeks to:
· Drastically diminish the powerful benefits of irrevocable grantor trusts – which are widely used to transfer wealth.
· Hamstring the effectiveness of Grantor Retained Annuity Trusts (GRATs) – one of the most powerful strategies to effectively transfer the growth of one’s estate while maintaining the original wealth.
· Eliminate valuation discounts on the transfer of private businesses, including family partnerships and limited liability companies – frequently used to compress gift and estate values to minimize taxation.
Watch the video to review the urgencies presented by these possible tax law changes and to hear McManus & Associates’ perspective on planning during a period of continuing uncertainty. For recommendations tailored to your circumstances, contact the firm at 908.898.0100.