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Trusts & Estates Law News
  
  

Estate Planning in a Biden Administration: February 9, 2021

On January 20, 2021, Democrat Joe Biden took office as the 46th President of the United States. In addition, effective 2021, Democrats won control of both the House and the Senate for the first time in ten years.

Many clients are rightfully asking, how does this change in leadership impact my estate planning?  Although no tax or policy changes have been officially announced or presented, we can reasonably foresee that changes will be coming.

This newsletter is intended to provide a general overview of the following potential changes that could impact estate planning, based on positions taken by President Biden during his campaign. Each of these topics is further explained in the articles that follow:

In this issue:

Because each estate plan is personalized for an individual or couple, whether you should make changes to your estate plan is dependent on a variety of factors, including the total value of your estate, your estate planning goals, your types of assets, and your overall lifestyle. It may not be advantageous for you to make any changes related to the proposed tax law changes. As always, the experienced trust and estates team at Foster Swift is ready to help you determine if any changes would be recommended for your estate to prepare for possible tax law shifts under the Biden Administration.

  

  

  
  

Decrease in Federal Gift and Estate Tax Exclusion Amount: No Time To Wait

Amanda Afton Martin

The time is now to review your estate plan. Though it is not certain what changes to the federal gift and estate tax laws proposed by President Biden will be made, significant opportunities will be missed if estate and income tax planning is delayed. Changes to the estate tax are common with each new presidency, especially to the federal estate tax exclusion amount (“Exclusion Amount”), and it is important to understand the possible impact on your assets...

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   Amanda Afton Martin

Amanda Afton Martin

Amanda Email  Amanda Phone

  

  

  
  

Loss of Basis Step-Up at Death and Increase in Capital Gains Tax

Michael C. Zahrt

The Internal Revenue Code (the “Code”) currently taxes long-term capital gains at lower rates than ordinary income. Depending on the taxpayer’s taxable income, the current rate is between 0% and 23.8% (including the Net Investment Income Tax). The Code also currently provides a “step-up” in basis upon the death of a taxpayer, which causes the tax basis of an asset to be increased to its fair market value on the date of the taxpayer’s death... 

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   Mike Zahrt

Michael C. Zahrt

Mike Email  Mike Phone

  

  

  
  

Changes to Income Tax May Make for Favorable Roth IRA Conversions

Alaina M. Nelson and Anna K. Gibson

In order to save for retirement, individuals may choose to contribute to a variety of different types of accounts, one of which is called an Individual Retirement Account (“IRA”). There are two types of IRAs – a traditional IRA and a Roth IRA. 

Contributions made to traditional IRAs are “pre-tax” contributions, whereas contributions made to Roth IRAs are “after-tax” contributions. However, unlike traditional IRAs, withdrawals taken from Roth IRAs are generally are not subject to income tax because the income tax was previously paid on the funds at the time of the contribution... 

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   Alaina Nelson

Alaina M. Nelson

  

  

  

  
  

Charitable Planning and Gifting in the Biden Era

Warren H. Krueger

With the election of Joe Biden, a number of changes to the U.S. tax laws may be on the horizon. If changes proposed by Biden are passed, estate and income tax planning for many taxpayers would be significantly impacted. Perhaps the most notable proposed change is a reduction of the federal estate tax and gift tax exclusion amounts...

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   Warren Krueger

Warren H. Krueger

Warren Email  Warren Email

  

  

  
  

Meet the Trusts & Estates Team

Lansing 313 South Washington Square Lansing, MI 48933

Practice Group Leader
Anna K. Gibson...agibson@fosterswift.com...517.371.8280

Mark J. DeLuca...mdeluca@fosterswift.com...517.371.8240
Charles A. Janssen...cjanssen@fosterswift.com...517.371.8262
Warren H. Krueger, III...wkrueger@fosterswift.com...517.371.8236
Douglas A. Mielock...dmielock@fosterswift.com...517.371.8203
Alaina M. Nelson...anelson@fosterswift.com...517.371.8206
Shamarr L. Gearhart...sgearhart@fosterswift.com...517.371.8101
Inna Musser...imusser@fosterswift.com...517.371.8263

Grand Rapids 1700 East Beltline, NE, Suite 200 Grand Rapids, MI 49525

Jonathan J. David...jdavid@fosterswift.com...616.726.2243
Todd W. Hoppe...thoppe@fosterswift.com...616.726.2246
Lynwood P. VandenBosch...lvandenbosch@fosterswift.com...616.726.2201
Michael C. Zahrt...mzahrt@fosterswift.com...616.726.2223
Julie A. Schumacher...jschumacher@fosterswift.com...616.726.2217
    
Holland 151 Central Avenue, Suite 260 Holland, MI 49423

Ryan E. Lamb...rlamb@fosterswift.com...616.796.2503
Jack A. Siebers...jsiebers@fosterswift.com...616.796.2501
Jennifer B. Van Regenmorter...jvanregenmorter@fosterswift.com...616.796.2502

Southfield 28411 Northwestern Highway, Suite 500 Southfield, MI 48034

Nicolas Camargo...ncamargo@fosterswift.com...248.785.4735
Matthew S. Fedor...mfedor@fosterswift.com...248.785.4734
Amanda Afton Martin...amartin@fosterswift.com...248.785.4724
Toni M.L. Harris...tharris@fosterswift.com...248.785.4739

Attorneys are listed in Blue; Paralegals are listed in Green

  

  
  

Remembering Al Claypool

Long-time member of the Foster Swift trust and estates team, Allan J. Claypool, died June 4, 2020 at the age of 79. Born in Battle Creek, Al received
an appointment to the US Naval Academy in 1962. After multiple tours,
Al returned to Michigan to marry Cathy and they soon relocated to Ann
Arbor where Al attended the University of Michigan Law School.

Al joined the firm in 1969 and spent his entire 50 year career with the firm. Al
was known for his character, his leadership, his intellect and love for his
community.

Claypool's obituary can be viewed here: estesleadley.com/obituaries/allan-claypool/

This past summer, the staff members and fellow attorneys at Foster Swift that knew Al best put together a tribute video in honor of his legacy: https://youtu.be/A9VaO2mhwHk

If you are a client of Al, we have a team of estate planners ready and capable to meet your needs. Contact us and we will help ease the transition to a new team member.

   Allan J. Claypool

Allan J. Claypool  

  

  

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Foster Swift Collins & Smith, PC E-Newsletters are intended for general information for our clients and friends. This newsletter highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how this information applies to any specific situation.

IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.

Copyright © 2021 Foster Swift Collins & Smith, PC.

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