Recap: The Top Ten Estate Planning and Estate Tax Developments of 2021

Bessemer Trust’s Senior Fiduciary Counsel, Ron Aucutt, joined CEPC members on January 19th to discuss his selections for the 2021 top ten estate planning and estate tax developments, and what to look for as we kick off the new year. Using specific cases, Mr. Aucutt discussed his list of top developments which include:

#10: Estate Tax Closing Letter for a Sixty-Seven Dollar User Fee (Reg. §300.13, CCA 202142010) – Mr. Aucutt noted the new regulation to restore the closing letter and impose a fee.

#9: Intergenerational Split-Dollar Life Insurance – Using the Estate of Morrissette as an example, he spoke with attendees about trying to work with clients to get a succession plan in place early while the client is physically and mentally able to express their wishes.

#8: John Doe Summons to a Law Firm (Taylor Lohmeyer)

#7: The Weight To Be Given to Post-Death Developments (Estate of Michael J. Jackson) – The late Michael Jackson continues to be talked about as Mr. Aucutt used his case (which is 265 pages) to discuss the value of image and likeness for tax purposes.

#6: The Donor’s Relinquishment of Control over a Donor Advised Fund (Fairbairn, Pinker)

#5: Splitting Gifts and Bequests – Mr. Aucutt spoke about several cases (Smaldino, Estate of Warne, Buck) to emphasize what really happened regarding splitting gifts and what appeared to have happen – noting how estate planning advisors need to monitor what gifts their clients are splitting or bequeathing.  

#4: Bold Proposals to Coordinate Transfer Taxes and Income Taxes – Many proposals ended up not having any action in 2021 and advisors and clients still need to keep an eye out on what could end up materialized in the future.  

#3: Playing with the Basic Exclusion Amount, Including Anti-Anti-Clawback

#2: Proposed Increased Income Tax Rates for Trusts and Estates – Mr. Aucutt spoke about the Build Back Better Act for 2022 and how the proposed increased income tax rates will affect certain thresholds and what it means for future estate planning.

And the #1 development for 2021 is once again the Continued Health Challenges. While we have made great strides and continue to move forward each day while we fight fatigue and impatience, the global pandemic still impacts the industry (and the world). Advances in technology continue to keep planners connected to clients and being remote and/or in the office has proven to be a positive outcome allowing individuals to have flexibility of where they can work. Mr. Aucutt also commented that he thinks if his generation had the opportunities like what we have right now, the estate planning industry would have benefited much earlier. He also mentioned that while there are many positives there are of course continued challenges such as handling training new employees/mentoring/teamwork while being remote.

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