Katzenberg Discusses 2023 Tax Legislation and Current Tax Exemptions

Andy discussed the top issues estate planning advisors should prepare for this year.

“Since Republicans took control of the House, it is unlikely there will be any tax legislation affecting clients in 2023,” he said. “However, the economic downtown may make clients very concerned about their current positions and reluctant to do more planning. Helping clients see the forest through the trees here will be very important for advisors as this is actually an opportunity to move assets with lower values outside their taxable estates.”

Andy added, “The basic idea [of] buy low sell high … applies to estate planning when using your exemption. You want to use assets with lower values and high growth potential to maximize the exemption you use. Using an asset with a deflated value (but expectation of rising back up again) is an excellent strategy.”

Regarding recently reintroduced legislation to permanently repeal the estate tax, Andy said, “It’s unlikely this legislation will pass either both [chambers] of Congress or a presidential veto. The exemption currently stands at $12,920,000 per person [for 2023], so a couple would have almost a $26 million exemption. This makes any type of repeal hard to sell as necessary to the general public or a majority of Congress.”

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