FORECASTS & TRENDS E-LETTER
by Phil Denney
January 9, 2024

IN THIS ISSUE:

1. New Year’s Resolutions

2. Cybersecurity Awareness

3. Gift and Estate Exemptions Limits Increase in 2024

Happy New Year! A new year is a great opportunity to reflect on the past and look forward to the future. Perhaps you are already working on some new goals or are revisiting some past goals that didn’t quite progress as you’d planned.

Have you made any new resolutions for 2024? I really don’t understand why people would wait until the start of a new year to resolve to do something different in their life, especially if they have known for some time the need for a change. If you recognize anytime in the year that something needs to change in your behavior, why wait? Get it done and be the person you know you should be in 2024.

Cybersecurity Awareness

Some of you will remember the television series set in New York City, NYPD Blue. I still remember when the shift sergeant would send his folks out on the streets, he always said to them, “Be careful out there.” Well the same goes for you in securing your personal and financial information.

Scammers are getting more sophisticated every day. You can see it in the unsolicited emails and phone calls you receive. You must keep your guard up.

Here are  a few tips to protect yourself.

? Be Skeptical: Always question unsolicited contacts, especially if they are asking for personal or financial information. Don’t be afraid to hang up the phone or delete the email. As for me, a phone caller that isn’t in my cell phone contact list will get ignored. If it is important, they will leave a message. I can then choose whether to return the call. If they don’t leave a message, I block them.

? Secure Personal Information: Never share your Social Security number, Medicare information, or bank details with anyone unless you initiate the contact and trust the entity.

? Consult Trusted Sources: Before making significant financial decisions, it’s advisable to consult trusted family members, your legal advisor or your financial advisor. A second opinion might help you see potential red flags.

? Educate Yourself: Stay updated on the latest types of scams, so you know what to look out for. Avoiding fraud requires constant vigilance.

? Protect those passwords: I don’t know about you, but I have a lot of passwords to keep up with – passwords for online banking, online access to my investment accounts, access to my work and personal computers, passwords to my favorite charity websites for gifting and on and on it goes. You have to be careful out there. You need to protect those passwords.

You can write them all down and secure them in some way. Whatever you do, don’t put them under your keyboard or put them in your wallet/purse where they can be easily compromised. Perhaps consider using a password manager such as LastPass, Dashlane or 1Password.

A few more things. I recommend you use multi-factor authentication when available. Also, keep your computer and smart phone operating systems up to date. If your computer or smart phone is no longer getting security updates, they are probably too old. It is time to get a new phone or a new computer.

Gift and Estate Exemptions Limits Increase in 2024

In the Bible it says, “It is more blessed to give than to receive.” Well the federal government is offering you some help.

The year 2024 brings us more reasons to be generous since the Internal Revenue Service (IRS) has increased the limits for gift and estate tax exemption amounts to their highest amounts ever.

Those with large estates should consider gifting during their lifetime to reduce taxes by using the annual gift and lifetime gift and estate tax exemptions. Right now, you may give an unlimited number of people up to $18,000 each in 2024 without taxes. For married couples starting in 2024, a combined gift of $36,000 can be made to any number of people, tax-free.

More good news: the IRS announced that the lifetime estate and gift tax exemption will increase to $13.61 million in 2024. Yes, I know most of us wish we had this problem. Still good to know. A gift exceeding the annual limits won’t automatically prompt a gift tax. The difference is taken from the person’s lifetime exemption limit, and no taxes are owed.  

Let’s say you were feeling really generous and bought a friend a car for $20,000 in 2024. You would have exceeded the annual limit of $18,000 but wouldn’t owe any additional taxes. You’d use IRS Form 709 to report the gift and deduct $2,000 from your lifetime exemption of $13.6 million for this year.

Gifts between American spouses are virtually unlimited. Couples have $27.2 million in estate tax exemptions, and going over this limit is only taxed upon the surviving spouse’s death.

However, a gift to a non-U.S. citizen, regardless of whether or not they are a U.S. resident, falls under different rules and is subject to an annual tax exclusion amount. The annual amount one may give to a spouse who is not a U.S. citizen is $185,000 in 2024.

Something else to keep in mind — unless Congress acts, the lifetime estate and gift tax exemption is due to return to the pre-2017 Tax Cuts and Jobs Act level of $5.49 million on December 31, 2025.

By the way, did you know that 56% of Americans believe that estate planning is important, but only 33% of adults in the U.S. have documented their end-of-life plans? The most commonly selected reason among those without a will was that they plan to but haven’t gotten around to it yet. Look folks, it is important to at least have a will. It doesn’t have to be fancy. If you have young children at home, you need to declare in your will who the guardians of your children will be should both parents die on the same day.

If you don’t at least have a will, know that if you die without one (intestate) that your state will decide who gets your stuff for you. They will also decide who will get your kids too. Whoever the state picks could be the last person on earth you want to take care of your young children. Below is your Round Tuit. So please get around to having a will if you don’t have one already. And be sure to tell your adult children where it is.

All the best,

Phil

 

Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc., a Registered Investment Adviser under the Investment Advisers Act of 1940. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of the named author and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific advice. Readers are urged to check with their financial counselors before making any decisions. This does not constitute an offer of sale of any securities. Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have their own money in markets or programs mentioned herein. Past results are not necessarily indicative of future results. All investments have a risk of loss. Be sure to read all offering materials and disclosures before making a decision to invest. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.