New Proposed Regulations: Anti Clawback Rule Exception

On April 27, 2022, the IRS released proposed regulations that follow up on the initial “Anti-Clawback” regulations released in 2019.  The proposed regulations provide guidance on how various estate planning strategies may be treated in situations where the unified estate and gift tax exemption is lower on the taxpayer’s date of death than it was on the date the strategy was implemented.  Since lifetime gifts are factored into the estate tax calculation, planners were rightly concerned that a lifetime gift might not have the desired tax effect if the client died when the exemption was lower, bringing the large gift back into the estate but with a lower date-of-death exemption used for calculation purposes. The 2019 regulations ensured that lifetime gifts would not be “clawed back” into the estate by stating that the exemption used for estate tax calculation purposes is the higher of the date-of-death exemption and the exemption available at the time of the lifetime gifts. However, those regulations did not cover all situations, such as GRATs and other strategies where property was given away during lifetime but a portion (or all) of it could still be included in the client’s estate at death.

The 2022 proposed regulations are designed to cover those situations, and in this complimentary webinar we’ll take a closer look at what they provide, including how they and the 2019 final regulations operate. Topics to be covered include:

• Revocable transfers and transfers taking effect at death
• Life estates
• GRATs
• Gifts made via an enforceable promise
• Impact on portability
• The “use it or lose it” rule in the final regulations
• Use of promissory notes and the new 18-month rule
• And more

Speakers: Jonathan G. Blattmachr, Esq., Professor Mitchell Gans, Martin M. Shenkman, Esq

There are no professional advancement credits (CPE, CLE, etc.) offered for viewing this webinar.

This may constitute attorney advertising.