2023 Estate Planning Updates: What You Need to Know

Estate Planning

With the onset of 2023, the landscape of estate planning law has seen significant changes. Here, we break down the most important updates and how they may affect you.

1. Gift Tax Exclusion for 2023 The gift tax exclusion for 2023 has seen an uptick to $17,000. This implies that donors can gift up to this amount to any individual, or multiple recipients, without it affecting their lifetime exemption. Moreover, there are no requisite filings for gifts within this range.

2. Updated Federal Estate Tax Exemption There’s good news on the Federal Estate and Gift Tax exemption front. For 2023, the exemption limit has risen to $12.92 million for individuals or a whopping $25.84 million for married couples. This is a jump from the previous $12.06 million in 2022. The important note here is that both the gift and estate tax work in tandem. This means, throughout one’s life, the total gifts given combined with the assets left after death can total up to $12.92 million without being subjected to the Federal Estate tax.

Remember, the annual gift exclusion doesn’t factor into this cap. For gifts beyond the annual exclusion, you’d file using the Gift Tax Return form 709.

The IRS has provided clarity regarding gifts made between 2018-2025, reassuring individuals that there will be no “claw backs” for those passing away post-2026. Essentially, gifts made within this period are safeguarded under this tax exemption. Yet, a heads-up: post December 31, 2025, the exemption is expected to drop to roughly $6 million as per the 2012 Act.

3. Anti-Isolation Restraining Orders Thanks to California Assembly Bill 1243, which came into effect on January 1, 2023, protective measures against elder abuse have been fortified. This bill enhances the Elder Abuse Act, enabling parties with a pre-existing personal relationship with a vulnerable adult to pursue anti-isolation restraining orders. This ensures that the vulnerable adult can maintain important relationships without interference from potential perpetrators.

It’s vital to understand that the legal process in these situations will require a judge to delve into intricate family dynamics. For those seeking an anti-restriction order, a petition would need to be filed with the court.

Additionally, AB 1243 empowers judges to ascertain if “specific debts” resulted from elder abuse. But pursuing damages would necessitate litigation and a full-fledged trial.

4. 2023 SECURE Act Guidelines For those inheriting a rolled-over IRA or annuity post the original owner’s demise in 2023, it’s imperative to liquidate it within a decade. Moreover, Mandatory Required Distributions become obligatory annually in this context. Post the death of the inheritor, there’s a five-year window to submit a portability return to the IRS.

Key Legal Rulings from 2022 to Consider:

  • Bruno v. Hopkins: A cautionary tale where a beneficiary’s litigation against a trustee, which the court deemed as being in bad faith, led to her footing the legal bill to the tune of $925,000.
  • Logan v. Country Oak Partners, LLC: This case emphasizes the limited scope of an Advance Healthcare Directive, which doesn’t extend to financial matters such as arbitration agreements.
  • Balisteri v. Balistreri: Here, the absence of a notary acknowledgment rendered a trust amendment invalid. A vital lesson in the importance of professional legal assistance when altering your estate plan.

Need Guidance? Should you have any queries or require a comprehensive understanding of how these legal changes could affect your estate plans, our seasoned attorneys are here to assist. Reach out to our office to schedule a consultation.


Leave a Reply

Your email address will not be published. Required fields are marked *

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Connect with us