It’s January and everyone is starting to receive tax documents for 2024. If you are a Personal Representative or a Trustee, what do you do with these documents? Attorney Brittany Hinojosa Citron discusses your legal obligations regarding tax filings. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.

The Corporate Transparency Act (CTA) is a federal law passed in 2021 with a start date of January 1, 2024.  The purpose of the law is to reduce money laundering and tax fraud.  The manner in which Congress seeks to achieve this goal via the CTA is to require every ‘entity’ (other than those that are exempt) to file a report with the Financial Crimes Enforcement Network (FinCEN) disclosing detailed information about the individuals who are associated with the entity as owners and as managers who exercise substantial control.   This is called a Beneficial Ownership Information report or BOI.  An ‘entity’ is defined as a company that was formed by filing with the Secretary of State’s office.  

This law primarily impacts small businesses formed as a corporation or an LLC.  Those who created an LLC to own their rental or investment real estate for liability protection purposes are also required to file a BOI.  The government estimates that the filing requirements will impact more than 32 million companies that were in existence before January 1, 2024 and an additional 5 million entities formed in 2024 and each year going forward.  The estimated cost to administer this law is $22 billion, plus an additional $2 billion each year for updated reports.

The law requires entities in existence as of January 1, 2024, to file their Beneficial Owner Information report no later than January 1, 2025.  Entities created during 2024, were required to file with FinCEN within 90 days.  The law carries very steep penalties for failure to timely file.  

Needless to say, many people are unhappy with this law and argue that is an unwarranted governmental intrusion.  Lawsuits have been brought against the federal government to prevent its enforcement.  

Here’s a brief overview of the major legal wrangling over enforcement of the CTA as of today (January 15, 2025):

• On December 3, 2024, a federal district court judge for the Eastern District of Texas issued a nationwide preliminary injunction prohibiting the government from enforcing the law. 
• The federal government appealed the injunction and on December 23, 2024, a 3-judge panel of the Fifth Circuit Court of Appeals lifted the injunction reinstating the filing requirement.  Following that ruling, the filing deadline was extended from January 1, 2025 to January 13, 2025. 
• On December 26, 2024, the Fifth Circuits merits panel issued a ruling reinstating the nationwide preliminary injunction against enforcement of the CTA.  This is where the law stands today.  FinCEN has updated its website with a statement to the effect that reporting companies are “not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.” 

The Fifth Circuit has put this matter on an expeditated tract.  Briefs from both sides are due by February 28, 2025 and a hearing on the matter is scheduled for March 25, 2025.

So small business entity, you are safe from the CTA reporting requirements for the time being but you may want to be ready to file on a moment’s notice if the matter is resolved in the government’s favor and a short deadline enacted. 

Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

January, 2025

© 2025 Samuel, Sayward & Baler LLC

The holiday season is a time of joy, celebration, and, for many, a whirlwind of planning. From organizing travel itineraries to curating gift lists, preparing holiday feasts to decorating the house, the key to a low(er)-stress holiday lies in planning ahead. Yet, as we rush to finalize our December to-dos, there’s another type of planning that often gets overlooked—estate planning.

Imagine walking into a store on Christmas Eve, only to find empty shelves, long lines, and mounting frustration as you scramble for that perfect gift. The stress of last-minute holiday preparations can overshadow the joy of the season. Similarly, delaying estate planning—or neglecting it altogether— can burden your loved ones with avoidable uncertainty and legal complications. Without a clear will or trust in place, your family may face lengthy court battles, misunderstandings, or financial burdens. 

The parallels between holiday preparation and estate planning are striking. Both require foresight, attention to detail, and collaboration with loved ones to ensure things run smoothly. Just as last-minute Christmas shopping can lead to chaos, waiting until the eleventh hour to address your estate can result in unnecessary complications and stress for your family in the future, ultimately falling short of truly addressing your intentions and the needs of your family.

The Holidays: A Perfect Time for Estate Planning Conversations

The holiday season provides a unique opportunity to have meaningful conversations about estate planning. Why? Because families are often gathered together under one roof. These moments of togetherness are perfect for discussing important topics that might otherwise be postponed indefinitely.

Here’s why it works:

1. Everyone’s Present: Coordinating schedules can be challenging, but the holidays naturally bring people together, making it an ideal time to discuss your plans and ensure everyone is on the same page. It’s also an opportunity to ask family members if they are willing to take on roles like trustee or guardian, so you can confirm their understanding and readiness to fulfill these responsibilities.
2. Reflective Atmosphere: The end of the year often prompts introspection. People tend to think about their priorities, legacy, and what truly matters in life. Estate planning aligns naturally with this mindset.
3. Generational Involvement: If you’re concerned about your aging parents’ estate plan, the holidays allow you to have those conversations and ask questions in a warm and supportive environment. Do they have a plan in place? When was the last time they updated their documents? The estate plan they signed years ago may not reflect their needs today or the current laws. 

If you’ve already taken steps to organize your estate, sharing your own experiences can make the discussion more approachable. Explaining why you found it important may encourage others to see the value in planning for their future. It’s also crucial to be patient and understanding, recognizing that estate planning is a deeply personal process. Give your loved ones time to process the idea, and avoid pressuring them into immediate decisions.

While estate planning may not seem like a festive endeavor, it is one of the most thoughtful gifts you can offer your loved ones. Preparing your estate plan in advance spares your family from difficult decisions and potential conflicts, ensuring your wishes are honored and their burden is lightened. By taking the time to prepare, you’re sparing them from difficult decisions and potential conflicts in the future.

Celebrate with Confidence

Just as careful holiday planning allows you to relax and enjoy the season, a well-thought-out estate plan provides peace of mind that your family will be cared for no matter what. This holiday season, take a moment to address both the short-term joys of the festivities and the long-term wellbeing of your loved ones.

By planning ahead for both, you can celebrate the present and safeguard the future—a gift that truly keeps on giving.

 

Attorney Leah A. Kofos is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© 2024 Samuel, Sayward & Baler LLC

 

 

During the hustle and bustle of the holiday season, it is important to remember to spend some time preparing for the upcoming year as 2024 winds down. From strategic gift-giving to consulting with your accountant about year-end tax planning, taking necessary retirement account distributions, and ensuring your estate planning documents are properly executed and your Trust funded, now is the time to review the status of these estate and financial matters. Here are five things you can do during December to ensure you are protecting your assets and providing peace of mind for you and your loved ones as we enter 2025.

1. Make Gifts to Family Members.  

Every individual may gift up to a certain amount to one or more individuals within a calendar year without the giver or the recipient having to report it to the Internal Revenue Service (IRS).  This is called the “annual gift tax exclusion” and for 2024, the amount is $18,000.  The annual gift tax exclusion amount increases to $19,000 for 2025.  For example, let’s say Jane wants to give her daughter Anne $18,000 for Christmas.  Jane also wants to give her son Alex $18,000.  Jane can do this so long as the total gift amount given to each child is $18,000 or less from January 1, 2024 through December 31, 2024. If Jane is married, she and her spouse may each gift the annual gift tax exclusion amount, meaning Jane and her spouse can gift a total of $36,000 to each Anne and Alex during 2024 (which is known as gift splitting).

However, if Jane alone gave Anne $10,000 at the beginning of 2024 and wants to give Anne another $18,000 in December, Jane will have given Anne a total of $28,000 in 2024 which is over the annual gift tax exclusion amount of $18,000.  Gifts over the annual gift tax exclusion to any one person require the filing of a federal gift tax return.  In Jane’s case, she would file a federal gift tax return with the IRS reporting a $10,000 gift ($28,000-$18,000 = $10,000).  It is vital to note that neither Jane nor Anne pays any federal taxes on the amount over the annual gift tax exclusion amount.  This is because Jane has a certain amount that she can gift to individuals over the course of her lifetime (which is tracked by filing the federal gift tax return) before taxes must be paid. This is called the “lifetime exemption” amount, which is $13.61 million for 2024, and includes both lifetime gifts and gifts given at death.  For 2025, the lifetime exemption amount will be $13.99 million per individual.  

Giving gifts can be a way to spread cheer to the gift recipients while at the same time reducing the value of your estate which will save your heirs estate tax following your death.  When making gifts it is important to consider the assets you should retain to pay your own expenses and any care that may be needed in the future.  Consult with your estate planning attorney and/or tax preparer to see if gift-giving is a tax savings strategy you should consider in light of your future needs.

2. Consult With an Accountant. 

If you have an ownership interest in a small business or commercial property, consult with an accountant regarding end of year income tax planning. Additionally, you may want to check in with your accountant if your ownership interest is held in an LLC, corporation, or other applicable entity because you may need to file a Beneficial Ownership Information (BOI) report with the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) before January 1, 2025, to comply with the regulations of the Corporate Transparency Act that passed at the beginning of this year.

3. Retirement Accounts: Take Your Required Minimum Distribution and/or Confirm Your Designated Beneficiaries. 

If you have reached the age where you must take Required Minimum Distributions (RMDs) from your retirement accounts (IRAs, 401(k)s, etc.), you generally must withdraw the RMD before the end of the year.  If you do not take your RMD by the end of the year, you may face paying an excise tax on the amount you were required to distribute but did not.  

Whether or not you must take RMDs, it is worth spending a few minutes to confirm you have properly designated primary beneficiaries and contingent (back-up) beneficiaries on your retirement accounts. This can typically be easily accomplished by accessing your retirement accounts online and reviewing your designated beneficiaries or asking the financial institution where your retirement accounts are held to send you written confirmation of the beneficiaries on your accounts. 

4. Execute Your Estate Plan Documents and Complete Your Trust Funding. 

If you plan on traveling for the holidays and/or the winter months, sign your new or updated estate plan documents now so that you have the peace of mind knowing you and your loved ones will be cared for should something happen during your travels. If you created a Revocable Living Trust as part of your estate plan, complete your trust funding.  Trust funding is the process of retitling certain assets into the name of your Revocable Living Trust.  It also often includes confirming the beneficiary designations on your retirement accounts and life insurance policies.  If you did not receive written instructions from your attorney about funding your trust, or have not completed your trust funding, now is a good time to do so.

5. Update Your “Support Team” Contact Information and Password List. 

If you do not already have a list, create a document identifying the individuals you have named in your estate plan documents (health care agent, attorney-in-fact, Personal Representative, Trustee, Guardian, Conservator), your lawyer(s), financial planner and accountant, along with their contact information.  If you already have such a list, review it to confirm all the information is still accurate.  This list will be invaluable to your loved ones should something suddenly happen to you.

Create or update a list of all the digital devices (Smartphone, laptop, etc.) you own and online accounts (Facebook, Instagram, bank accounts, investment accounts, retirement accounts, etc.) that you access online. Make sure the list is in a safe place (physically and/or electronically) and that a trusted individual knows where (and how) to locate it. It will be critical for your attorney-in-fact, Personal Representative and Trustee to have access to this information to monitor the accounts for fraudulent activity, close the accounts, consolidate the accounts, and take other necessary actions.

Making end-of-year financial and estate planning decisions is essential for protecting your assets and loved ones. Whether through utilizing the annual gift tax exclusion amount of $18,000, consulting with your accountant about tax planning, taking required retirement account distributions, or completing your estate plan documents and trust funding, there are several actions you can take to ensure your affairs are in order before year-end. At Samuel, Sayward & Baler LLC, we can help you determine and implement these important year-end planning steps to ensure you are prepared for the coming year.

Attorney Abigail V. Poole is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member and Immediate Past President of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020. 

 

December, 2024

© 2024 Samuel, Sayward & Baler LLC

 

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