“The beginning of 2018 saw new major tax legislation, commonly known as the Tax Cuts and Jobs Act (TCJA), which has had a significant effect on estate planning for many individuals,” the National Law Review reminds readers. Given that most of the new provisions related to estate planning "sunset" on January 1, 2026, the authors point out, “now is an ideal time to revisit estate plans to ensure they make full use of this opportunity.”
At Geyer law, some of the specific gifting aspects of the new law which we are emphasizing include:
- The amount of the annual exclusion gifts (that may be transferred free of gift and estate tax) was increased. In 2019 that amount is $15,000 per gift per person.
- Unlimited amounts of tax-free gifts may be made by paying tuition costs directly to the recipient’s school or paying their medical expenses directly to a health care provider (this includes paying health insurance premiums).
- planning for individuals with special needs
- implementing health care directives
- designating guardians for minor children
- charitable planning
As long-time estate planning advisors, we realize that tax savings is hardly the only motivation for gifts to charity - our clients want to make an impact in areas of society about which they care by leaving a legacy. True, tax deductibility has been part of the planning process, and at Geyer Law we work together with clients’ tax advisors to craft individualized tax and charitable gifting plans.
Whether under the pre-2018 tax law, current TCJA rules, or post-2026 rules, planned giving programs can be a win-win. Besides benefiting causes meaningful to them, there is the potential for clients to reduce both capital gains and estate tax. In so many different ways, we maintain, it still pays to be generous!
- by Rebecca Geyer