Tyler Allain, Natalie Chaudhury, and Matthew Fecteau (Goodwin LLP): U.S. House Proposals Would Significantly Impact Estate Planning for High Net Worth Individuals If Enacted (September 30, 2021)

Tyler Allain, Natalie Chaudhury, and Matthew Fecteau, of (Goodwin LLP), have made available for
download their article, “U.S. House Proposals Would Significantly Impact Estate Planning for High Net Worth Individuals If Enacted,” published in JDSUPRA. The article begins as follows:

The U.S. House Committee on Ways and Means’ tax proposals would significantly impact estate planning for high net worth individuals if enacted. Gift, estate and GST exemption amounts would be decreased; grantor trusts would be subject to tax in the grantor’s estate and certain grantor trust benefits would be eliminated; and valuation discounts for certain nonbusiness assets would be eliminated.

The U.S. House Committee on Ways and Means has approved a slate of legislative proposals (the “House Committee Proposal”) intended to raise revenue. The House Committee Proposal includes a variety of proposed changes to the Internal Revenue Code (the “Tax Code”). This alert is not a comprehensive analysis of the House Committee Proposal but instead focuses on a small number of proposals that, if enacted, would affect high net worth taxpayers and their estate planning: (i) a reduction in the federal estate and gift tax exemption and the generation-skipping transfer (“GST”) tax exemption amounts, effective as of January 1, 2022; (ii) the inclusion of any grantor trust created after the date of enactment in the estate of the donor, the taxation of distributions from such trusts which are traceable to contributions made after the date of enactment and the inclusion in the estate of the donor of a portion of such trusts attributable to contributions made after the date of enactment; and (iii) and the elimination of valuation discounts for certain nonbusiness assets, effective as of the date of enactment. High-income taxpayers may wish to discuss with their financial advisors other proposals contained in the House Committee Proposal, including increases in the top marginal income tax and long-term capital gains rates and new limitations on IRA contributions.

Click here to view Tyler Allain, Natalie Chaudhury, and Matthew Fecteau’s summary of “U.S. House Proposals Would Significantly Impact Estate Planning for High Net Worth Individuals If Enacted.”

Posted by Bennett Mansour, Associate Editor, Wealth Strategies Journal