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Legacy Matters
BlogsPublications | January 10, 2024
3 minute read
Legacy Matters

Reflections on 2023 – The Calm Before the Storm?

As 2023 came to a close, the members of Warner’s Private Client and Family Office group looked back over the year to review the goals we helped clients achieve, the intriguing projects we worked on and the growth and professional development of the practice group.

In 2023, we again added talented attorneys to the group who will expand our client-serving capacity in the short term and become the next generation of attorneys to serve the needs of high-net-worth individuals and families, and their family offices, businesses and foundations.

We were delighted to continue to receive both individual attorney and group recognitions for our work from local, national and international organizations such as Grand Rapids Magazine, DBusiness, Crain’s, Michigan Lawyers Weekly, Super Lawyers, Best Lawyers® and Chambers and Partners.

2023 was a year without a real threat of significant tax changes, which enabled us to help clients focus on additional planning, including updating their core planning, understanding and implementing planning from prior years and tackling charitable, family office, business succession and pre-sale planning.

We continued discussions with our clients on whether to form private trust companies. Mark Harder also remains an active member of the State Bar of Michigan committee working on legislation that would allow the formation and operation of private trust companies in Michigan. We hope to see movement on the proposed legislation later in 2024.

We also enjoyed connecting with our clients. In February we co-hosted an event for our snowbird clients in Southwest Florida with our friends at the Grand Rapids Community Foundation and the Community Foundation of the Holland/Zeeland Area. In October we held our inaugural Private Client and Family Office Symposium, focused on engaging the next generations in the family’s future. This event was a wonderful opportunity to connect with clients in person. We and our clients enjoyed hearing from our keynote speaker Eric Allyn as he shared the story of how his family made the decision to sell the family’s 100-year-old business, Welch Allyn, Inc., as well as their experience in transitioning to new ways to connect, invest and relate to one another.

Looking ahead to 2024, we see two big changes that will impact our private clients and family offices. The first is the Corporate Transparency Act, which was effective January 1, 2024, and which requires reporting to the federal government in 2024 the beneficial ownership of many new and existing corporations, limited liability companies and limited partnerships controlled by our client families.

The other big change on the horizon relates to the estate, gift and generation tax exemptions. On January 1, 2024, the lifetime gift and estate tax exemption rose to $13.61 million, giving wealthy individuals an unprecedented ability to transfer significant wealth free of transfer taxes. Many of our clients engaged in significant transfer tax planning in 2020 and 2021, when the exemptions were $11.58 million and $11.7 million, respectively. Clients who used the large exemption in those years now have as much as an additional $2 million of exemption available to use in their planning.

Sometimes good things must come to an end. These unprecedented exemption amounts are currently slated to be cut in half at the end of next year. This means clients have less than two years to decide how to plan for and take advantage of their unused, higher exemption amounts before they disappear.

We expect the confluence of the increased exemption for 2024 and prospects for a dramatic reduction in exemption after 2025 to inspire thoughtful giving over the next 18-24 months. Expect to hear more from us in the coming weeks about these topics.

The Private Client and Family Office group thanks you for the opportunity to serve you in 2023, and we wish you the very best for this new year.