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December 2020 - In This Issue: |
2021 RETIREMENT PLAN LIMITS
THE “PERFECT STORM” FOR ESTATE PLANNING
A NEW SCAM TO WATCH OUT FOR
ARTICLES OF INTEREST
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Last month I wrote how excited we were to now be able to provide our services to the residents of Pennsylvania.
This month I have more good news about Garden State Trust Company to share with you. After 12 years in Toms River, we have moved our headquarters to Wall, New Jersey, just a short 10 miles north of Toms River on the Garden State Parkway. For those of you who are clients and for those of you who are professionals who refer their clients to us, don't worry! We made sure to pack the reliable, relationship-based services we have always provided our clients and will continue to provide in our new location. We are so very proud to have so many people rely on our independent company for wealth management and trust and estate services, no matter where we are.
If I may, it has been 12 years since I founded Garden State Trust Company and established our headquarters in Toms River. My history in Ocean County is a lot longer than 12 years. In 1974, I came from a New York City bank to Ocean County as a trust officer for a small community bank. In 1981, I started in the first trust department for a Savings & Loan under the Monetary Deregulation Act of 1981 with my office in Ocean County. In 1990 I started Manchester Trust Company, in Manchester Township, which eventually became the trust division of Sovereign Bank. I left Sovereign/Santander in 2007.
So, for me Ocean County has many, many years of memories. I look forward with excitement to creating new memories in our new headquarters in Monmouth County with my dedicated team of professionals.
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To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. However, for 2021 the IRA contribution limit stays at $6,000 if the individual is younger than age 50, and $7,000 if he or she attains age 50 or older in 2021. Read more in our informational article, 2021 Retirement Plan Limits.
During this Holiday Season all of us at Garden State Trust Company wish you peace, joy, prosperity and above all else good health throughout the coming year.
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2021 RETIREMENT PLAN LIMITS |
To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. However, for 2021 the IRA contribution limit stays at $6,000 if the individual is younger than age 50, and $7,000 if he or she attains age 50 or older in 2021. Other limits are shown in the following table: |
Catch-up contributions are permitted by those employees who are 50 years of age or older during the calendar year.
Personal saving for retirement never has been more important. These tax benefits make saving a bit less painful.
(December 2020)
© 2020 M.A. Co. All rights reserved.
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THE “PERFECT STORM” FOR ESTATE PLANNING |
According to estate planner Maurice R. Kassimir, Esq., the present moment has provided a "perfect storm" for wealthy families to meet with their estate planners and implement some wealth transfer strategies. In a November webinar, Mr. Kassimir pointed to three factors that make these times unique:
• The prospect of higher taxes on "the rich." The scheduled 2026 drop in the federal transfer tax exemption remains in place. Although few now predict that the drop will be accelerated, even fewer predict that the current exemption levels will be made permanent. Thus, there is every incentive to make large gifts soon to "lock in" the higher amounts, $11.7 million per person in 2021. What's more, the yawning federal budget deficits are likely to be addressed with higher taxes, with most of the burden targeted to the wealthy.
• Covid-19 has caused valuation discounts to soar. Economic pain and uncertainty reduces the value of many assets, notably small businesses and especially real estate, even though publicly traded stocks seem to be doing well. Mr. Kassimir observed that in New York City, the value of some commercial real estate is down as much as 75% as tenants are no longer able to pay their rents. With such large discounts in place, the $11.7 million lifetime exemption from gift tax will shelter far more in assets than would have been true one year ago.
• Historic low interest rates. The low interest rates provided by the IRS tables makes this an exceptionally good time for many estate planning strategies, such as grantor-retained-annuity trusts (GRATs). The November 2020 7520 mid-term rate was just 0.47%.
Implicit in these examples is an assumption that most asset values will return to normal after a vaccine brings the pandemic to an end. The other problem planners may face is that in times of severe economic uncertainty, even those with $20 million in assets may not feel rich enough to part with a substantial portion of them simply to save taxes for their heirs.
(December 2020)
© 2020 M.A. Co. All rights reserved.
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A NEW SCAM TO WATCH OUT FOR |
This actually happened to an acquaintance of ours who we will call Jim.
A few years ago, one of Jim's credit cards from a major card issuer stopped working. He called the issuer and was told that his card had been suspended when it was observed to purchase meals in two states hundreds of miles apart, a sure sign the card numbers had been stolen. The bogus charges were erased, and Jim's confidence in the card issuer went way up, given their diligence.
About a month ago, Jim received a robocall from the card issuer, saying that his card had been compromised again. Instead of replying the to call, he went online to check his purchases. Sure enough, there were several bogus charges. Jim called the issuer to have his card cancelled and a new one issued.
Jim only had the new card for about a week when he got the same robocall again, exactly the same except for the return call number. Unbelievable! He almost replied to the call but decided to first check out how his card had been misused.
There were no bogus charges.
The second robocall warning that his card had been compromised was a scam. A scam that managed to use the nearly identical warning call that the legitimate card issuer used!
Was this just a coincidence, getting a scam call so soon after getting a replacement card? Or did the scammers have some inside information on who is getting a new card, and using familiarity with the robocall warning to put victims at ease, making them more vulnerable?
We do not know the answer to that question. What we do know is that constant vigilance is always required. Although some robocalls are legitimate, some may not be. The better practice is to call a card issuer's number provided on the credit card, rather than responding to the telephone number provided in any robocall.
(December 2020)
© 2020 M.A. Co. All rights reserved.
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WALL - MAIN OFFICE
732-255-5000
CHERRY HILL REGIONAL OFFICE
856-251-1300
LEBANON REGIONAL OFFICE
908-287-7188
LINWOOD REGIONAL OFFICE
888-323-5535
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Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2020. All rights reserved. |
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