2021 Year-End Estate Planning Advisory

Overview

During 2021, COVID-19, the new Biden administration, the Tax Cuts and Jobs Act (TCJA), the Coronavirus Aid, Relief and Economic Security Act (CARES ACT), the American Rescue Plan (ARP), and the uncertainty about the Build Back Better Plan (BBB Plan) dominated the planning landscape.

As outlined in our previous four Year-End Estate Planning Advisories, the TCJA made significant changes to individual and corporate income taxes, restructured international tax rules, provided a deduction for pass-through income and eliminated many itemized deductions. Most significantly for estate planning purposes, the TCJA temporarily doubled the estate, gift and generation-skipping transfer (GST) tax exemptions. Absent legislative action by the BBB Plan, which may or may not occur prior to the end of the year (discussed below), many of the changes imposed under the TCJA — including the increased exemptions — will sunset after December 31, 2025, with the laws currently