As Quoted in the New York Times, Ani Hovanessian Offers Advice on Tax and Wealth Planning Strategies to Consider in Light of COVID-19 and the 2020 Election

3 min

Ani Hovanessian, chair of the New York Tax and Wealth Planning Group at Venable LLP, was quoted in two recent New York Times articles on tax strategy implications in this tumultuous year.

Tax Strategies to Embrace, or Avoid, Before the November Election

Sept. 18, 2020

Is your gifting and wealth planning plan flexible enough to withstand different outcomes of the upcoming election? The outcome may result in significant changes to current income, estate, and gift tax laws, which include the possibility that the current combined estate tax and gift tax exemption of $11,580,000 will be reduced by at least half, and potentially reduced even further to $3,500,000 per individual. In a Biden administration with a corresponding Democratic majority in Congress, these changes may be effective January 1, 2021, which provides a limited window to prepare and implement a gifting plan that utilizes an exemption before the laws change.

The ultimate flexibility for couples is to create trusts that move the money out of one spouse's estate but maintain the other spouse's access to it. Called spousal lifetime access trusts, they can act as a safeguard against changes to a tax strategy that could backfire. As Hovanessian notes in the article, "if we fail to plan, we plan to fail."

When Sheltering in Place Puts Your Tax Strategy at Risk

May 15, 2020

If your domicile status has changed because of the COVID-19 pandemic, how can you avoid unexpected tax bills? Hovanessian was quoted on developing a proactive tax strategy as lockdowns disrupt the lives of millions of Americans. For some, a key part of their residency for tax purposes—their domicile status—may have shifted since March for a number of reasons: they are now working from home, they've fled a hot spot, or they thought they could ride out the pandemic in a vacation house.

According to the article, these unplanned geographic dislocations could result in unforeseen tax bills for those who are not diligently keeping records. Many states, including New York, have set a threshold of 183 days, or half the year, to determine residency. Yet three months into the pandemic, New York has not issued guidance on whether it will count the days in quarantine toward its state residency. People are sure there are going to be exceptions, but we need to be very cautious," said Hovanessian. "Even though we're in a pandemic and unprecedented times, these states are going to need tax revenue to make up for all the public policy and aid decisions they're making now," she added.

Should you wish to speak to our New York Tax & Wealth Planning team about this opportunity, please reach out to the team:

Ani Hovanessian at ACHovanessian@Venable.com or +1 212.503.9835
Lawrence Mandelker at LDMandelker@Venable.com or +1 212.503.9817
Laura Belkner at LMBelkner@Venable.com or +1 212.370.6284
Dana Bressman at DMBressman@Venable.com or +1 212.503.0891