Legal Update: November 2023
This update covers key legal changes in estate planning, elder law, and business law as of November 2023, including IRS updates, social security adjustments, and the Corporate Transparency Act developments.
Estate Planning
IRS 2024 Exemption and Gift Amounts
The IRS has updated tax provisions for 2024, notably increasing estate and gift tax exemptions to $13,610,000 and the annual gift exclusion to $18,000.
Impact: These changes reflect ongoing inflation, offering increased tax-free transfer flexibility for individuals and couples.
Massachusetts Estate Tax Exemption Increase
Massachusetts has raised its estate tax exemption to $2 million, retroactive from January 1, 2023, lessening the tax burden on estates just over the prior $1 million threshold.
Impact: Estate representatives may now seek refunds or extensions based on this new exemption.
California Uniform Directed Trust Act
California’s new law defines roles of trust directors and trustees, streamlining trust administration.
Impact: The act provides a legal framework for using trust directors, enhancing trust management flexibility.
Pennsylvania Trust Exemption from Realty Transfer Tax
In Ebersole v. Pennsylvania, a trust successfully achieved exemption from realty transfer tax through retroactive modification.
Impact: This case demonstrates a strategy for trusts to be amended retroactively, aligning with tax exemption requirements.
Life Insurance Policy Beneficiary Changes
The case of American Gen. Life Ins. Co. v. O.H.M. emphasizes strict compliance with policy terms for changing life insurance beneficiaries.
Impact: This reinforces the importance of adhering to policy procedures for beneficiary designations.
Elder Law and Special Needs Law
2024 Social Security Cost-of-Living Adjustment
The Social Security Administration announced a 3.2% COLA for 2024, impacting Social Security and SSI beneficiaries.
Impact: This adjustment, though smaller than 2023’s, assists those on fixed incomes in countering inflation.
Business Law
New FinCEN Reporting Guidelines
The Treasury Department issued a final rule for using FinCEN identifiers, simplifying reporting under the Corporate Transparency Act.
Impact: This reduces administrative burdens for businesses in filing multiple reports.
IRS Employee Retention Credit Withdrawal Process
The IRS introduced a process for withdrawing Employee Retention Credit claims filed under duress, allowing employers to avoid penalties for ineligible claims.
Impact: This provides relief for employers who filed ineligible claims due to external pressure.
California’s Employment Law Enhancements
California enacted several laws bolstering employee rights, including increased paid sick leave and restrictions on noncompete agreements.
Impact: Employers must ensure compliance with these new regulations and provide necessary employee notifications.
