After over 165 years, the firm’s Warwick office has recently undergone a major renovation. 11 Oakland Avenue was originally owned by the first mayor of the village of Warwick, William Ogden, and the last major update was in 1895. The current facelift includes an installation of a new roof, insulation and siding.

Our investment underscores our commitment to the firm’s first location and our hopes that it will continue to serve the community well into its third century as a fixture on Oakland Avenue.

The combination will give Stage Law Firm clients the opportunity to benefit from the firm’s local Warwick presence and regional scope for sophisticated estate, tax and elder law planning.

In 2007, Attorney Joseph Donohue established the Warwick, New York office at 11 Oakland Avenue. We have been pleased to serve many families and small businesses in the Warwick community over the years. Since founding our flagship office, the practice has grown from a single office to a multi-jurisdictional firm with offices in New York, New Jersey, Connecticut, and New Hampshire. In an effort to better serve the needs of clients in surrounding states, we recently opened a Boston, Massachusetts location. We are also planning an expansion Naples, Florida for our “snowbird” clients. Our practice now serves over 8,000 individuals and businesses and continues to flourish thanks to the relationships we have built with our clients and vendors. We look forward to continuing to serve your families and your colleagues throughout the northeast.

How to position yourself for the sunset of the Tax Cuts & Jobs Act

Effective January 1, 2018 the Tax Cuts and Jobs Act (“TCJA”) more than doubled the federal gift and estate tax exclusion amount, increasing the individual exclusion from $5,450,000 to $11,400,000. Today in 2022, the exclusion is at an all-time high of $12,060,000 per person or $24,120,000 for a married couple.

Currently, federal gift taxes apply to inter vivos transfers of money and assets valued above $16,000 per year, per donor, per recipient. Federal estate taxes apply to the value of a decedent’s taxable estate following death. The federal gift and estate tax exclusion is first applied against any taxable gifts made during a person’s lifetime at the time such gifts are made, and any remaining exclusion is applied against the individual’s federal estate tax.

In practical terms, during one’s lifetime, the federal gift and estate tax exclusion allows a person to transfer assets valued up to the exclusion amount (as well as any future appreciation of such assets) out of his or her taxable estate, whether to a trust or to another individual or entity, free of federal gift tax. After one’s passing, any unused exclusion amount will be applied to the decedent’s taxable estate, and only the value of the estate exceeding the exclusion amount will be subject to federal estate tax at rates up to 40%.

The current enhanced federal gift and estate tax exclusion provides an optimal environment for those seeking to employ tax planning strategies to minimize future estate tax exposure. However, the enhanced exclusion created by the TCJA is set to expire, or ‘sunset’, on December 31, 2025. On January 1, 2026, the exclusion will be reduced by about half to an estimated $6,200,000.

One important consideration to factor into your tax and estate planning is that any exclusion used prior to the 2025 sunset will be first deducted from your post-sunset exclusion amount. Meaning, if prior to the sunset you use $6,000,000 of your federal gift and estate tax exclusion, and in 2026 the exclusion is reduced to $6,200,000, you will only have $200,000 remaining in federal gift and estate tax exclusion at your disposal.

In light of this caveat, one method to consider if married, is to apply all gifts made prior to the 2025 sunset against one spouse’s federal gift and estate tax exclusion, while leaving the other spouse’s federal exclusion untouched. This allows a couple to retain ownership of assets that are difficult to transfer outside of the taxable estate (such as retirement accounts). If one spouse passes with unused federal estate tax exclusion, the surviving spouse can avail him or herself of the deceased spouse’s exclusion via the Deceased Spouse Unused Election (“DSUE”).

It is also important to note that some states, including Massachusetts and New York, impose a state-level estate tax in addition to the federal estate tax. For example, Massachusetts imposes a graduated estate tax ranging between .8% and 16% of the total value of the estate to estates exceeding $1,000,000, and New York imposes an estate tax at rates between 3.06% and 16% on estates exceeding $6,110,000. New Yorkers whose estates exceed 105% of the $6,110,000 threshold (i.e., $6,415,500) will be taxed on the entirety of the value of their estate from the first dollar.

Those whose taxable estates exceed both state and federal taxation thresholds will essentially be subject to a double tax on the value of their taxable estate – one to the federal government at rates up to 40%, and one to the state government at then-prevailing rates. Our attorneys can help you determine how to minimize or eliminate your state estate tax exposure while taking advantage of the enhanced federal gift and estate tax exclusion.

In anticipation of the 2025 sunset, if your assets exceed the applicable estate tax thresholds, you should speak to a tax and estate planning professional to understand your total estate tax exposure and determine options to reduce your estate tax exposure at both a federal and state level. Call us to find out how we may be able to help you.