BLACK LIVES MATTER

Pasternak & Fidis Reporter

October 29, 2020

D.C.’S Estate Tax Exemption Reduced

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.