Category: David J. Lorber & Associates

SETAUKET, NEW YORK — In 2017, then-President Donald J. Trump enacted the Tax Cuts and Jobs Act of 2017. As part of this legislative package, single high-net-worth individuals were able to exempt the first $13 million from their taxes and couples could do the same at $26 million. However, when the exemptions sunset on December 31, 2025, the exemption will be cut in half — $6.5 million for individuals and $13 million for families — and nearly 2 million families are expected to pay a 40% tax rate on their assets.

Attorney David J. Lorber of David J. Lorber & Associates, PLLC advises wealthy families to make a plan for their gift and estate tax planning for the next tax year as soon as possible. “It is possible Congress can propose changes to the TCJA before it sunsets at the end of 2025,” he says. “In either case, waiting until next year to get everything together is not a good idea.”

Another reason to start planning sooner rather than later, Mr. Lorber says, is that the Internal Revenue Service is keeping a watchful eye out for tax evaders. The agency has hired an additional 87,000 agents and surely some of those resources will be utilized in expanding their gaze. To think that high-net-worth individuals and families would be of interest is not a far reach.

“The last thing you want to do when approaching this issue is to take actions that will cause you to come under scrutiny from the IRS and risk an unnecessary audit,” Mr. Lorber says. “Be sure to go through everything with your accountant and financial adviser(s) with full transparency.  Tell them how much you have in taxable assets, while at the same time, ask them for ways to protect your assets from tax liabilities and preserve them for future generations.”

Mr. Lorber also suggests reviewing estate plans to see if their heirs will be incurring an unforeseen tax liability. “I would strongly suggest meeting with an estate planning attorney and financial team to make sure everything is in order before the TCJA expires at the end of next year,” he says.

                                                   

For more information, call (631) 750-0900 or visit www.djlorberlaw.com.

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About David J. Lorber & Associates, PLLC

Located in Setauket, New York, the law firm of David J. Lorber & Associates, PLLC concentrates its practice in estate planning, probate and estate administration, modifications and foreclosures, litigation and real estate. The firm serves clients from all over Long Island and the New York metro areas — all of Suffolk County, Nassau County, Queens, Brooklyn, Manhattan, Bronx and Westchester. Whether your legal needs involve estate planning or real estate law, David J. Lorber, Esq. can completely address your concerns for a wide variety of issues. For more information, call (631) 750-0900 or visit www.djlorberlaw.com.

ATTORNEY ADVERTISEMENT: PLEASE BE ADVISED this press release does not constitute legal, tax, accounting, investment or other professional advice.  For informational purposes only.

SETAUKET, NEW YORK — David J. Lorber, Principal, David J. Lorber & Associates, PLLC, says clients should start preparing for any changes proposed by the Internal Revenue Service (IRS) regarding the distribution of traditional Individual Retirement Accounts (IRAs) they inherited from their late family members, especially with more taxes that could be levied on the heirs.

Before 2019, the IRS allowed payments of traditional and Roth IRAs to be distributed over time. That changed in 2019 when, under the SECURE Act, payments had to be made within 10 years. In May 2021, the IRS loosened the 10-year rule by allowing the heirs to accept lump-sum payments in the tenth year. That all changed on February 2022, when the IRS proposed a new rule in which the decedents’ heirs must accept annual payments from the traditional IRAs over the next 10 years (Roth IRAs would be exempt from this rule).

“The new rule proposed by the IRS will hurt those who stand to inherit a traditional IRA from their loved ones,” Mr. Lorber says. “The forced payments cannot be tax-deferred and so this will impact their finances, especially if they are still working, since IRA distributions are taxed as if they were income.”

In addition, those who are expected to receive a payout this year must calculate their final payment at their tenth year. IRA distributions are determined by how old the recipient is and how much money remains in the account. Mr. Lorber says this will only confuse and further burden the recipients.

“The new IRS rule is asking those who are inheriting these IRAs to be accountants, actuaries and financial planners,” he says. “This is much too confusing, and the IRS should revert the IRA distribution rules to the way it was before the SECURE Act.”

To determine how much money each heir should be receiving annually from their loved one’s traditional IRA, Mr. Lorber says, the account holder should consult with an estate planning attorney as well as a certified public accountant (CPA). “Working with a CPA will help you ascertain the best ways to structure the estate to maximize the benefit to your heirs.”

For more information, call (631) 750-0900 or visit www.djlorberlaw.com.

 

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About David J. Lorber & Associates, PLLC

Located in Setauket, New York, the law firm of David J. Lorber & Associates, PLLC concentrates its practice in estate planning, probate and estate administration, modifications and foreclosures, litigation and real estate. The firm serves clients from all over Long Island and the New York metro areas — all of Suffolk County, Nassau County, Queens, Brooklyn, Manhattan, Bronx and Westchester. Whether your legal needs involve estate planning or real estate law, David J. Lorber, Esq. can completely address your concerns for a wide variety of issues. For more information, call (631) 750-0900 or visit www.djlorberlaw.com.

ATTORNEY ADVERTISEMENT: PLEASE BE ADVISED this press release does not constitute legal, tax, accounting, investment or other professional advice.  For informational purposes only.