Football’s Hall of Fame and Estate Law Changes Both Moving to the End Zone

By Stephen J. Silverberg
New York Elder Law Attorney

The Pro Football Hall of Fame recently announced the finalists for the Class of 2022, and it occurred to me that estate law legislation is a lot like the Pro Football HOF. The list is announced, some fall by the wayside, but eventually, fifteen names make it and the number of bronze statues in Canton, Ohio increase.

Federal lawmakers work in the same way. We have a long history of laws being delayed, revised, failing to get passed on the first and even the second go-round. For example, the carry-over basis laws put into place in 1976 were repealed, then added back. The child-care credit took four times to make it into law.

Just because the changes regarding the carry-over basis and other laws that will impact estate and tax planning didn’t make it through in 2021, don’t count them out just yet.

I’m advising clients to act now, because when these laws do eventually pass (and I believe many of them will), it will be too late to take advantage of the current laws.

That includes the mega-Roth IRA, which was created as a means of encouraging regular Americans to save for retirement and bloomed into a way for wealthy Americans to tuck away millions, or billions, in accounts with no requirements for withdrawals and no taxes due on withdrawals (taxes are paid when the money is contributed to the account).

We were concerned in December 2020 that Congress would enact retroactive changes, which may happen for taxes, but not for estate and gift taxes, which are rarely retroactive. Logistics make it near impossible. When the law changes regarding estate and gift taxes, the IRS has to get forms and tables to millions of practitioners. Even when everything is online, it does not happen fast enough. Taxpayers and executors would run into countless complexities, like filing a final tax return within in the nine-month period allotted and then having to file an amended return—possibly more than once.

If you really want something to worry about, some legislation contains the phrase “effective on enactment,” which means the minute President Biden’s pen is lifted, the law is in effect and must be complied with. But estate planning matters are pretty complex, and lawmakers know it takes time to prepare for changes.

Greek philosopher Heraclitus said change is the only constant in life. This applies to Congress as well.

About the Author
Stephen J. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA.