To Our Clients and Friends


As 2023 hits full stride, we at GSW want to bring some new legal developments to the attention of our clients and colleagues. As always, it is our pleasure to serve you and we wish you a wonderful spring season.

 The Corporate Transparency Act Creates New

Reporting Requirements for Business Entities

The Federal government will begin enforcing certain reporting requirements for most small business entities next year to help combat money laundering and terrorism financing. The Corporate Transparency Act was passed in Congress on January 1, 2021, and rules issued late last year by U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) have brought legal compliance into focus. “Beneficial Ownership Information” must be submitted for each qualifying entity, including corporations, partnerships, and limited liability companies. There are limited exceptions for large operating companies, charitable organizations, and dormant entities, among others.


Before the end of 2024, each entity that exists as of January 1, 2024 must report information about the entity and every “beneficial owner” (including a trust) that either owns >25% of the entity’s ownership interests or exercises substantial control over the entity. The required information includes each beneficial owner’s name, birth date, home address, and even a copy of a government issued ID showing a unique identifying number (e.g., passport). This information will also be required prospectively for the individuals who file or register new entities. The information also must be kept up to date.


These requirements represent an administrative burden and the penalties are steep, including both fines and possible imprisonment. We are available to counsel clients about whether the reporting requirements apply to your specific entities and how to satisfy the requirements properly. 2023 may also be a good time to wind down any older entities that have outlasted their usefulness, and our attorneys can advise and assist with that process.


In related news, Pennsylvania has also passed legislation requiring most Pennsylvania entities (but not trusts) to file reports every year instead of every ten years as under the prior law. This requirement begins in 2024, and penalties for noncompliance will begin in 2027.

The Secure Act 2.0 Updates Many Aspects of Federal Law on Retirement Plans

Late last year, Congress passed the Secure Act 2.0, which produced a number of changes affecting clients with retirement plans. One of the most critical changes is deferring the time at which a participant must begin taking his or her annual required minimum distributions (“RMDs”). The new beginning dates are on a sliding scale and allow RMD deferral for certain groups. We recommend checking with your advisors to determine your particular RMD requirements, but the changes will be particularly important for participants currently in their early 70s, who may be able to take advantage of additional deferral opportunities.


The penalty for failing to take the proper RMD is also decreasing from 50% to 25% of the difference (or even as low as 10% if the shortfall is corrected in a timely manner). This change will be particularly helpful when someone dies close to year-end without having taken their full RMD.


Secure Act 2.0 also clarifies rules for disability trusts that hold retirement accounts, making it more straightforward (and beneficial, tax-wise) to contribute assets to a trust for a disabled or chronically ill person. We are available to help you structure your beneficiary designations and discuss the options available for providing long-term financial support for loved ones with disability or chronic illness. 


For the charitably inclined, Secure Act 2.0 also now permits a one-time IRA charitable rollover to a charitable trust or gift annuity plan. The usual charitable exception allowing a participant to contribute up to $100,000 a year in RMD to qualified public charities remains in place, and will also now be indexed for inflation.


There are many other additional features of the Secure Act 2.0, which are too numerous to mention here, but a few of the other relevant highlights include:

  • Penalty-free early withdrawals are available under certain circumstances, mostly related to hardship or childbirth/adoption;
  • Catch-up contributions are now available for certain workers who wish to build up their retirement plans; and
  • The rules on Roth plans have been relaxed (including eliminating the RMD requirement for Roth 401ks starting in 2024).

There have been many changes to the traditional treatment of retirement accounts since the original Secure Act passed in 2019. The additional changes enacted by Secure Act 2.0 provide a great reason to check in with your GSW attorneys if you have not evaluated your retirement plan strategy recently.

Annual Exclusion Gifting Limit Raised

The annual exclusion amount (the value of gifts a taxpayer may make to a beneficiary free of gift tax each year) has been adjusted upward for 2023. This year, the annual exclusion amount is $17,000 per beneficiary. Therefore, for example, a married couple can directly gift up to $34,000 to each child in 2023 without incurring gift tax. Regular annual exclusion gifting can be a powerful way to transfer wealth free of estate and gift tax. Gifting plans can range from simple outright gifts for children to trusts for grandchildren or further generations, but we can illustrate potential tax savings and help you develop a personalized gifting strategy if you are so inclined.


Also, the current lifetime exemption from estate and gift tax has gone up again in 2023 to $12.92M per taxpayer. This amount will continue to receive inflation adjustments each year until 2026, when there is a planned sunset of the increased exemption amount—as of January 1, 2026 the lifetime exemption figure will be cut approximately in half. Clients planning to take advantage of this use-it-or-lose-it bonus exemption should consider doing so now while there is still plenty of time to structure plans multi-step plans. The Biden Administration recently issued revenue proposals that, if enacted, could (among other things) foreclose the use of certain types of grantor trusts, current tax exemptions, or minority interest discounts in family entities—while these remain mere proposals, they signal areas where certain legislators are giving attention. Clients who have held off on taking action may want to consider moving forward on a plan now before potential power shifts in Congress or new legislation, which could conceivably take effect as early as January 1, 2024.


The attorneys at GSW are available to provide guidance on all of these topics and help make sure that our clients are adequately prepared to comply with new legal requirements and maximize their estate planning goals. As always, we are honored to be part of your trusted advisory team.

GSW Attorneys

Caitlin J. Akins

[email protected]


Peter J. Bietz

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Kathryn H. Crary

[email protected]


Tracy Blake DeVlieger

[email protected]


Matt Gilbert

[email protected]


Jack X. Jiang

[email protected]


Timothy D. Miles

[email protected]


Pam H. Schneider

[email protected]


W. Steven Woodward

[email protected]


GSW Paralegals

Leigh Ann Griffith

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Luciann Givonetti



Karen M. Smith

[email protected]


Experience and Extraordinary Expertise

Gadsden Schneider & Woodward LLP combines the sophisticated legal skills of a national or global law firm with the intimacy, informality and attentiveness to client needs that is characteristic of smaller firms. Contact us for all of your estate planning, trust and estate administration, trust and estate litigation, charitable gift planning and related areas of tax and fiduciary matters.




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