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A Message from Mary Ellen Zellerbach, IEEE Foundation Director

In celebration of Estate Planning Week 2021, Jeffrey Billings, Esq. Estate Planning Partner at Godfrey & Kahn, S.C and I discussed pending tax legislation, donor-advised funds, and the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) during the 2021 Estate Planning Trends: IEEE Foundation Spotlight Webinar. We provided practical takeaways to aid you with your planning for the coming year with a goal to demystify the 2021 estate planning trends. We battened down the hatches for the incoming tax update storm AND……..zero changes were made. 

What Happened?

After months of discussion and speculation, 2022 began with no new U.S. federal estate and gift tax legislation. As the proposed legislation made its way through the legislative process in 2021, the major proposed changes to federal estate and gift tax law were dropped. These discarded changes included a significant reduction in the federal estate and gift tax exemption, the different tax treatment of grantor trusts, and the elimination of the step-up in basis for appreciated assets at death. There is no indication that these changes will be revisited soon – at least not at the beginning of 2022.  But, of course, there is no guarantee. Any of these changes can re-surface in some form in the future.  

One important future development—enacted in 2017— is now only three years away.  After 2025, the federal estate and gift tax exemption will be cut from more than $12,000,000 to $5,000,000 per individual (plus an inflation adjustment between 2018 and 2025).

Despite all of the uncertainty, there are positives for donors beginning in 2022. They include:

• Increase in the Annual Gift Tax Exclusion. Due to an adjustment for inflation, annual tax-free gifts by an individual in 2022 increase to $16,000 per gift recipient, and $32,000 by a married couple.
• Increase in the Federal Estate and Gift Tax Exemption. The new federal estate and gift tax exemption beginning for 2022 increases to $12,060,000 per person, due to the inflation adjustment.
• Required Minimum Distributions (RMD) From Qualified Retirement Plans and IRAs. Changes in the life expectancy tables will result in lower required annual distributions from qualified retirement plans and IRAs in 2022.  This benefits taxpayers because the lower distribution will result in less taxable income and helps to continue to preserve and grow the principal of the account under favorable market conditions.

So What Now?

This is an opportune time to review and consult with your estate planning attorney to assess changes in your circumstances.  High net worth individuals who have not made lifetime gifts may want to consider taking advantage of the increased exemptions in case Congress revisits this legislation and certainly in advance of the 2025 change. 

It is never too early or too late to start! As you create or update your plan, consider the role IEEE has played in your life and the #IEEELegacy you want to leave. The IEEE Foundation team would be honored to assist with finding the right way for you to integrate IEEE into your plans. As always, be sure to consult your legal and financial advisors to ensure that a vehicle is consistent with your philanthropic and planning objectives.

If you have a plan in place that includes the IEEE Foundation, we invite you to share that news with us and join the IEEE Goldsmith Legacy League, our legacy giving group. Members of the League are Forever Generous.

We will continue to keep you updated as the landscape is ever-changing. Watch for more articles about estate planning and mark your calendars for Estate Planning Week from 17 to 23 October 2022 when the IEEE Foundation plans to host another estate planning webinar. 

Please contact us with any questions you may have about your estate and IEEE.
Phone: +1 732.562.5446 e-mail: d.deliberato@ieee.org. Visit the IEEE Foundation website at ieeefoundation.org/how-to-give to learn about all your giving options.

The information in this publication is for educational purposes only and is not intended as legal, tax or investment advice. If you are considering a planned gift to the IEEE Foundation, consult your tax and legal advisors to determine the best options for you.