San Antonio-Based Monticello Wealth Management Gives Sound Advice on How to Interlace Tax and Investment Decisions to Achieve Wealth Objectives
San Antonio-based investment advisor company Monticello Wealth Management (Monticello) today discussed tax relief for Texans following February’s severe winter storms and potential tax changes under the Biden administration.
This is an almost unprecedented time for Americans in terms of changes in tax laws stemming from both the COVID-19 pandemic and the recent winter storms,” said Monticello Senior Advisor Dan Slattery, CPA, PFS.
The administration and the U.S. Congress may also seek to raise the current estate tax rate and apply the estate tax to a much broader group of taxpayers. In 2018, the estate tax exemption—which is applied per individual and effectively doubled for married couples—increased from about $5.5 million to about $11.2 million. If the Biden administration lowers that exemption, the estate tax will impact many more families. Although the administration has not given specifics, indications are the exemption could be as low as $3.5 million. Therefore, certain individuals who have between $3.5 million and $11 million in property—such as retirement plans, personal residences, family businesses, savings accounts or other assets—could find themselves exposed to a 45% estate tax, where previously their exposure may have been zero.
On the positive side, if an individual makes a gift of $11 million now, but passes away during a year when the estate tax exemption has decreased to $3.5 million, there is no “recapture” or tax on the amount given away more than $3.5 million. Therefore, individuals who might find themselves subject to the estate tax should consider making gifts to family members sooner, rather than later, to minimize their exposure to future estate tax.
“With a new administration come new ideas and a new direction, and some of those new ideas may significantly impact how you think about your taxes and investments,” said Monticello President Todd Brockwell. “Monticello has extensive knowledge and experience to advise its clients on how to proactively interlace tax and investment decisions to achieve the best outcome for your wealth objectives and your family.”
