It’s important to anticipate potential 2020 Election outcomes as you steer your estate planning. What specific actions should you consider taking before 2021? Listen to McManus & Associates Founding Principal John O. McManus’s recent guidance to clients:
1. How will a change in the administration impact income taxes? Ordinary income and capital gains rates are expected to rise for families making in excess of $400k and many favorable income tax benefits may be limited or eliminated.
2. Likewise, what will Vice President Biden’s possible election mean for the ability to transfer wealth? The gift and estate tax exemptions will almost certainly be reduced by at least 50% with a possibility that gift and estate tax rates may increase to 50% or beyond.
3. What current financial indicators make this period of time a helpful environment for wealth transfers? Undervalued assets and business interests due to the pandemic and continuing rock-bottom interest rates are positive elements that foster that success of certain transfer strategies.
4. Why should you consider gifting closely-held businesses and interests in other private family entities before year-end? During President Obama’s tenure, Treasury Regulations were proposed that would eliminate valuation discounts between family members (and other wealth transfer tools) and it is possible that those restrictions will be revisited if a shift in control of government occurs.
McManus & Associates can help you take advantage of this window of opportunity before it closes. Call us today at 908-898-0100.