Client Alert: October 2021

Client Alert

As you have probably read, a bill has been introduced in the House of Representatives that will make significant changes to the tax code. Among the proposed changes is a reduction in the gift and estate tax exemption from $11.7 million to $6.05 million ($5 million, indexed for inflation) that would most likely be effective January 1, 2022. In addition, the bill proposes to change rules regarding certain types of irrevocable trusts that are taxed as ‘grantor trusts’ for income tax purposes. For example grantor trusts created or funded after the date of enactment would cause inclusion of the gifted assets in the Grantor’s gross estate for estate tax purposes. Grantor trusts include most irrevocable life insurance trusts, spousal lifetime access trusts (SLATs), grantor retained annuity trusts (GRATs), and qualified personal residence trusts (QPRTs).

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