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Halloween Review: Scary? Not so Scary?


Boo.  Here’s your Halloween edition of our monthly review of developments in elder law. Some are scary, but others not so much.

The IRS: Not So Scary?

We may another year to figure out RMDs from inherited IRAs. The SECURE Act changed the payout requirements for a decedent’s IRA, and many were surprised when the IRS indicated that the new “10-year” distribution rule in some cases required annual minimum distributions. Now, the IRS is hitting pause; final regulations won’t apply till 2023 – at least. Much less scary.

Related: 10 post-SECURE considerations for estate planning

Thanks to inflation, the estate tax thresholds will be at their least scariest level ever for 2023. The estate tax exemption will be $12.92 million (double that for married couples), and the annual limit on tax-free gifts will increase to $17,000. You can give $17,000 to as many people as you wish and not incur gift or estate tax. Not scary.

Related: Year-end tax planning tips, and ways to give to charity and cut your tax bill

Estates News: Scary

Joeseph Stancak died at 87 in Chicago in 2016 with $11 million, no will, and no obvious heirs. But investigators embarked on a search and discovered 119 relatives. Each will inherit about $60,000. What’s scary? That someone who accumulated $11 million had no estate plan. We’re betting he would have preferred that his money go to causes he cared about instead a bunch of remote relatives.

Planning: Scary, For Some

The down market has most of us sulking, but for one-tenth of the top 1%, it’s “a golden opportunity.” That’s because it’s a good environment for a grantor-retained annuity trust — or “Grat.” With the technique, appreciating assets are held in trust for a specified time. Afterward, any investment growth passes to heirs, and the owner gets the principal. Since the market is likely to improve, significant appreciation can pass to beneficiaries free of estate or gift tax.

Related: Multi-generational planning

Getting assets out of an estate is not always advisable. Such transfers may be beneficial for estate tax purposes but a disaster for income tax. Understanding your options is important. A little planning makes end-of-life transfers a lot less scary.

Elder Fraud: Scary

The U.S. Justice Department is upping its efforts to fight elder fraud by adding 14 U.S. Attorney’s Offices to its “Transnational Elder Fraud Strike Force.” And the U.S. Attorneys Office for the District of Arizona is one of them. While that sounds comforting, it won’t help most elder financial abuse, which comes from family members and care workers. Scary.

Getting Older: Scary, Not-so Scary

When aging adults want independence, balancing freedom and safety can be a challenge. The article points out: “When an elder is still competent to make decisions, and is independent, you can’t force them to do what you want, even if you know it’s safer than how they choose to live. They make choices and have to live with the consequences.” For those of us who care about them, that can be scary.

Related: How to handle challenges of caring for an aging parent

Aging can, however, grace. Photographer Marha Clarke turned her camera on her own life and created a multiyear portrait of growing older. She learned that “there’s a beauty that comes out of people when they accept who they are.” Clarke also documented her partner’s death and says that when he died, “It was amazing . . . . There was so much love in that room, you could cut it with a knife. I think it’s changed me. It’s given me a glimpse of what’s possible with humans.”  Not so scary.



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