In response to budgetary pressures, D.C. Mayor Muriel Bowser signed the “Estate Tax Adjustment Amendment Act of 2020.” The Act reduces the estate tax exemption from $5.76million in 2020 to $4 million for decedents dying on or after January 1, 2021. The exemption amount will be adjusted for inflation starting in 2022 and will continue to be non-portable between spouses. The Act becomes law on November 2, 2020, 60 days from the date it was submitted to Congress for passive review. The change to the D.C. estate tax exemption amount is a reminder of the importance of crafting an estate plan with sufficient flexibility to accommodate unanticipated changes to the estate tax laws. D.C. residents whose estates exceed the $4.0 million estate tax exemption amount may wish to review their estate plans to consider whether any adjustments are necessary considering the decreased estate tax exemption.
The Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”) took effect January 1, 2020, revising federal rules that govern the administration of qualified retirement plans (e.g., 401(k) and 403(b) plans) and IRAs. Among the changes effected by the new law is the shrinking of the class of beneficiaries who can “stretch” out their […]
The doubling of the federal estate tax exemption under the Tax Cuts and Jobs Act—from $5.49 million in 2017 to $11.18 million in 2018 ($11.4 million as of January 1, 2019)—has moved many wealthy Americans away from the impact of the federal estate tax. However, state estate taxes and state inheritance taxes remain a factor in estate planning for residents of […]
Years ago, I described to a close friend (let’s call her Cathy) the difference between a division among descendants per stirpes and a division among the same descendants per capita at each generation. In the midst of my explanation, Cathy suddenly exclaimed, “Oh! You mean like the Packers’ tickets?” This was a Eureka! moment; yes, […]
Best Lawyers named partner Nancy Fax the Trust and Estates Lawyer of the Year in DC, Maryland and Virginia. Because the publication uses peer nominations to develop its selective list, we are especially proud of this recognition. Congratulations, Nancy! Additional Pasternak & Fidis attorneys were recognized as best lawyers in Maryland in their respective fields: Jan White in Collaborative Law: […]
For a long time, the rule in Maryland has been that a divorce revokes the provisions of a will that benefit the former spouse, but we did not have the same rule for revocable trusts. Beginning October 1, 2016, the same rule will apply to revocable trusts—divorce will revoke those provisions of the trust that […]