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queens business
The Elder Law Minute TM
Applying the Treasury’s New Infl ation Adjustments
BY RONALD A. FATOULLAH, ESQ.
AND DEBBY ROSENFELD, ESQ.
Prior to the new tax law, the Federal
exclusion amount for estate taxes was
$5 million adjusted for infl ation from
the year 2011. Th e exclusion amount
is the amount that individuals can pass
to their family and loved ones without
the imposition of Federal estate
and gift taxes. In its annual Revenue
Procedures, the Department of the
Treasury issues infl ation adjustment
fi gures each year.
With the infl ation adjustment, the
Federal exclusion amount would have
been $5.6 million as of January 1,
2018. Th e new tax law eff ectively doubled
the exclusion amount. Ordinarily,
based on the Treasury Department’s
standard calculations, the exclusion
amount would have risen to $11.2 million.
However, the new tax law also
amended how the infl ation amount
is calculated. Due to the new adjustment,
the actual exclusion amount as
of January 1, 2018, is $11.18 million.
ELDER LAW
Clearly, the increase in the exclusion
amount is very signifi cant and off ers an
opportunity for serious and broad estate
tax planning. But this doubled exclusion
is only temporary and will expire
at the end of 2025. At such time, it will
presumably revert back to the original
$5 million, adjusted for infl ation.
A common question is whether the
exclusion should be utilized by taxpayers
if it is merely temporary in nature.
If, for example, someone gift s $10 million
in property to his children this
year but passes away in 2027, when the
exemption has reverted back to what it
would have been without the new tax
law, will his estate be subject to taxation?
An estate tax return is prepared
aft er a person dies and includes any
taxable gift s made during such person’s
lifetime. In this example, if the
exclusion has reverted back to $5 million
plus the infl ation adjustment, can
the fact that the gift was made at a time
when the exemption was $11.2 million
apply, thereby eliminating any estate/
gift taxes? Th e answer seems to be that
the exclusion at the time the gift was
made will apply. Section 2001(g) of
the Internal Revenue Code of 1986,
as amended, ostensibly considers the
time the gift was made in applying
the exclusion. Th e section directs the
Treasury to release regulations clarifying
this provision. Such regulations
have not yet been issued. Th us, the
answer is not 100% clear.
Based on the above, for those with
an estate that exceeds $5.6 million, it
would seem sensible to engage in current
gift ing to utilize this temporary
exclusion. Even if the excess gift does
get included in the individual’s estate
when he dies, it will still have been prudent
to make the gift . In such case, the
appreciated value (aft er the time of the
gift ) will escape estate taxation.
While the exclusion amount of
$11.18 million is transitory, there is a
myriad of estate and income tax planning
that can be implemented at this
time. One should also note the relatively
low New York State estate tax exclusion
(currently $5.25 million) and the
fact that New York does not impose a
gift tax, thus making the gift planning
all the more important. It is always
advisable to seek the counsel of a professional
who can off er a plan that is
custom tailored to one’s specifi c estate.
Ronald A. Fatoullah, Esq. is the principal
of Ronald Fatoullah & Associates,
a law fi rm that concentrates in elder
law, estate planning, Medicaid planning,
guardianships, estate administration,
trusts, wills, and real estate.
Debby Rosenfeld, Esq. is a senior staff
attorney at the fi rm. Th e law fi rm can
be reached at 718-261-1700, 516-466-
4422, or toll free at 1-877-ELDER-LAW
or 1-877-ESTATES. Mr. Fatoullah is
also a partner with Advice Period, a
wealth management fi rm, and he can
be reached at 424-256-7273.
RONALD FATOULLAH
ESQ, CELA*
editorial
Real-Time Feedback
As we move into
spring, employees and
managers begin to think
about their performance
reviews. Th e fact is that
providing and receiving
eff ective feedback
should not be a one time
a year event. Employees
respond best to real-time
feedback, such as immediate
praise for a job well
done, so that they can
repeat the desired performance
or make improvements where
necessary. Waiting six months to hear
positive or negative feedback from
the manager is not very eff ective. To
encourage continuous performance
improvement, here are some tips to
keep in mind:
A managers most
important job.
Th e most important job of
any manager is to provide
the resources necessary to
ensure their employee’s success.
Resources include the
managers’ time and experience
to help employees
appropriately navigate the
work environment. If you
want your team to perform
at their best, then providing
real-time feedback will give
them the resources they need to learn
and grow.
Employees want
prompt feedback.
Employees deserve and want timely
and prompt feedback. Managers
should take the opportunity to provide
feedback as soon as possible and
look for daily learning opportunities
to reinforce important skills.
Provide opportunity
for dialogue.
Th e most eff ective feedback involves
a two-way conversation. If the manager
and the employee engage in a
dialogue and actively listen to each
other’s thoughts, the outcome will be
more satisfying and productive for
both employee and manager.
Provide clear expectations.
If the employee doesn’t know what
is expected, the manager cannot
expect good results. Be clear about
your expectations and hold employees
accountable for specifi c deliverables.
Focus on strengths.
In order to have the greatest
impact on an employee’s success,
focus on what is most relevant
for the employee’s growth and
put an emphasis on the employee’s
strengths. Providing employees
with ongoing strength-based feedback
is the most effective way to
encourage performance improvement.
Do you have questions about how
to provide eff ective feedback to your
employees? Contact Mindy Stern
SPHR, SHRM-SCP, ACC and president
of AIM Resource Group Inc.
Visit the website at www.aimresourcegroup.
com or send an email
to info@aimresourcegroup.com with
questions.
EMPLOYMENT
MATTERS
MINDY STERN
SPHR, SHRM-SCP,
/www.aimre-sourcegroup.com
/www.aimre-sourcegroup.com
/www.aimre-sourcegroup.com
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