“Our new constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin’s letter to Jean-Baptiste Leroy, 1789.
For many of us, the end of the calendar year could not come soon enough. Between the social unrest, political turmoil, the COVID-19 pandemic, and the economic and societal upheaval created thereby, few of us will shed any tears for the end of the 2020 calendar year. Looking ahead, many clients and fellow advisors lament the lack of certainty surrounding government institutions, the future of tax laws, and perhaps the economic outlook.
In this time of uncertainty, I encourage our clients to make decisions based upon the certainties of life, decisions based upon their faith, their love for their families, and their charitable endeavors. Over this past year, I have been honored to help some clients make significant lifetime gifts. Some clients have helped with an adult child’s unexpected living expense costs, other clients with educational costs of their grandchildren, and other clients with the establishment of charitable strategies. While tax law changes might impact the tax efficacy of such lifetime gifting decisions, I am certain that none of the clients that I assisted this past year with significant gifting matters will regret their gifting decisions, given that these decisions were ultimately driven by non-tax considerations.
Keeping in mind that tax rules are likely to change in the coming years, we should plan on the following tax rules going into 2021: