William Finestone, of Blank Rome, has made available for download his article, Low Interest Rate Gift Planning, published in Estate Planning Magazine (July 2020). The abstract is as follows:
While clients still have all of 2020 to take advantage of annual exclusion gifts (currently $15,000 per donee) and the increased lifetime gift tax exemption (now $11,580,000 per taxpayer), practitioners may wish to recommend that clients not wait too long to take advantage of the current low interest rate gift opportunities for a number of reasons, including the advantage that once a gift is made, any future appreciation of the transferred property and any future income generated thereby will escape transfer taxes.In addition, future legislation could limit a client’s gift planning opportunities. Proposed changes that have been discussed in the past and that are likely to be discussed again include (i) eliminating “discounts” for closely-held business and real estate interests; (ii) prohibiting short-term (e.g., two-year) Grantor Retained Annuity Trusts (“GRATs”) (discussed below); and (iii)limiting the benefits of “defective” grantor trusts (discussed below) and long-term “dynasty” trusts. None of these changes has been enacted yet, but practitioners may wish to strongly recommend that clients in a position to do so take advantage of their gift tax planning opportunities sooner rather than later, after considering the impact of the gifts on their donees.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.