New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Enhanced Estate and Gift Tax Benefits for Avery Dennison Employees in 2024

Healthcare Provider Update: Healthcare Provider for Avery Dennison Avery Dennison has partnered with various healthcare providers for employee health benefits; however, specific provider affiliations may vary by region and specific employee health plans. To obtain the most accurate and relevant information regarding Avery Dennison's current healthcare provider, it is advisable for employees to consult their Human Resources department or employee benefits documentation. Potential Healthcare Cost Increases for Avery Dennison in 2026 In 2026, healthcare costs for Avery Dennison employees utilizing Affordable Care Act (ACA) marketplace plans may soar as premium hikes are projected to exceed 60% in some states. This stark increase is driven by the potential expiration of enhanced federal premium subsidies and rising medical costs. As many as 92% of marketplace enrollees could face an average out-of-pocket premium increase of over 75%. Employees should proactively assess their health plan options now to mitigate financial impacts and explore available employer-sponsored alternatives. Click here to learn more

As we transition into 2024, the landscape of federal gift, estate, and generation-skipping transfer (GST) tax laws has shifted significantly due to major inflation adjustments. For Avery Dennison employees focusing on their financial strategies, these changes present valuable opportunities for enhancing intergenerational wealth transfer and achieving greater tax efficiency.

The Internal Revenue Service (IRS) has raised the lifetime exemption levels for the federal estate tax and the GST tax considerably. Individual exemptions have grown from $12.92 million in 2023 to $13.61 million, a $690,000 increase. Similarly, for married couples, the exemption has surged from $25.84 million to $27.22 million. These adjustments facilitate significant wealth transfers to heirs or direct gifts to grandchildren (via GSTs) without incurring federal estate or GST taxes.

The aligned increase in both the estate tax exemption and the generation-skipping tax exemption allows for direct asset transfers to grandchildren or into trusts for their benefit, helping families circumvent the double taxation of estate taxes on subsequent generations.

However, these augmented exemption amounts are set to expire on December 31, 2025, unless new legislation extends them. Initially quadrupled by the Tax Cuts and Jobs Act of 2017, these exemptions will nearly halve if not renewed. This impending reduction underscores the importance of proactive estate and gift planning soon.

For 2024, the federal gift tax annual exclusion has also seen a roughly 6% increase to $18,000 per recipient, up from $17,000 the previous year. This enables Avery Dennison employees to devise strategic gifting plans that preserve estate value and promote wealth transfer between generations.

With the 2025 sunset date approaching, maximizing these increased exemptions is crucial to save on taxes. Consider utilizing the annual gift tax exclusion, which allows up to $18,000 per recipient in 2024 without impacting your lifetime estate or gift tax exemptions. Additionally, direct payments to medical providers for healthcare or educational institutions for tuition are exempt from gift taxes.

Including a gift tax return (IRS Form 709) is essential for contributions exceeding the annual exclusion, as part of comprehensive estate planning.

Avery Dennison employees should also explore trust-based strategies like lifetime irrevocable trusts, which remove assets from the taxable estate, and Grantor Retained Annuity Trusts (GRATs), where the grantor receives annuity payments for a set period before the remainder passes to beneficiaries, potentially tax-free.

Spousal Lifetime Access Trusts (SLATs) are another option, allowing one spouse to leverage their gift tax exemption to establish a trust for the other, who then accesses the trust's assets.

Engaging with financial advisors is crucial to navigate the complexities of state-specific estate and gift tax laws, which vary widely and affect overall tax obligations and estate planning strategies.

As federal tax exemptions are about to sunset, this is a critical time for Avery Dennison employees to review and possibly revise their estate and gifting strategies. These calculated decisions can lead to more efficient wealth transfer to future generations and significant tax savings.

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When making these choices, it is advisable for professionals and retirees to consult with advisors to formulate their plans in light of current tax rules and potential future changes.

For Avery Dennison employees retiring or nearing retirement, consider establishing a Qualified Personal Residence Trust (QPRT) in 2024. A QPRT allows homeowners to transfer their residence into a trust, residing there for a designated period, potentially reducing the taxable value of their estate. This strategy is particularly valuable ahead of potential reductions in exemption amounts post-2025, enabling high-value assets to be transferred at a reduced tax cost.

Like a gardener preparing for a fruitful season, the upcoming changes in inheritance and gift tax laws in 2024 are an excellent opportunity for Avery Dennison employees to strategically transfer wealth and make impactful gifts. The expanded exemption levels, akin to fertile soil, facilitate the management of estates to minimize tax implications and maximize growth for future generations. Acting now, before these favorable conditions sunset in 2025, is like planting a crop at the optimal time to ensure a bountiful harvest for years to come.

How does the transition of the Avery Dennison U.S. Pension Plan to a group annuity contract affect current employees who are nearing retirement, and what steps should they consider taking during this transition to ensure their benefits are secure from Avery Dennison?

Current Employees Nearing Retirement: The transition to a group annuity contract should not affect the accrued benefits of current employees nearing retirement. The terms of the annuity payments will match those provided by the previous pension plan. Employees should ensure their personal information is updated and consult with the Avery Dennison Retirement Center to understand the timing of their benefits commencement during the transition period.

In what ways does Avery Dennison support employees who are considering their options for retirement benefits, particularly those who may not have previously explored their pension plan details prior to the transition to an insurer?

Support for Employees Exploring Retirement Options: Avery Dennison assists employees by providing detailed information through their retirement center and online resources. Employees are encouraged to review the changes and implications of the annuity transition and contact the retirement center for personalized advice, particularly if they have not previously explored their pension plan details.

Can you elaborate on the implications of the group annuity contract for employees who have recently retired from Avery Dennison, particularly concerning how their benefits are administered compared to the previous pension plan structure?

Recently Retired Employees: For those who have recently retired, the administration of their benefits will shift from Avery Dennison to the selected insurer but this should not change the amount, timing, or form of the benefits they receive. This ensures continuity in the administration of benefits without affecting the retirees directly.

For employees currently receiving benefits through Avery Dennison, how will the transition to the selected insurer impact the continuity and reliability of their monthly payments, and what measures are in place to safeguard these payments?

Continuity and Reliability of Payments: The transition involves the selection of a highly rated insurer, ensuring the reliability of ongoing monthly payments. Avery Dennison has put measures in place, including a thorough selection process involving an independent fiduciary, to safeguard these payments.

What are the specific protections offered to beneficiaries under the group annuity contracts once the Pension Plan transitions away from Avery Dennison's administration, and how do these protections differ from those provided under the Pension Benefit Guaranty Corporation (PBGC)?

Protections for Beneficiaries: After the transition, the state guaranty associations, rather than the Pension Benefit Guaranty Corporation (PBGC), will offer protection to beneficiaries. This shift means that while the federal insurance via PBGC will no longer apply, state-level insurance, which has its own limits and guarantees, will take over.

In light of the transition to the group annuity, how should employees at Avery Dennison go about updating their personal information, such as addresses or banking details, and what timelines should they be aware of during this process?

Updating Personal Information: Employees should update their personal details such as addresses or banking information through the Avery Dennison Retirement Center by specific deadlines during the transition period. Post-transition, such updates should be made directly with the new insurer.

How does Avery Dennison ensure that the financial health of the selected insurer for the group annuity contract is sufficient to meet the obligations to its retirees, and what standards are applied during the selection process?

Financial Health of the Insurer: Avery Dennison ensures the financial adequacy of the selected insurer through a rigorous selection process managed by an independent fiduciary. This includes evaluations of the insurer's financial stability, claims-paying ability, and overall business practices.

After the transition to an insurer is complete, what should employees of Avery Dennison do if they have questions regarding their retirement benefits, and how will communication be handled moving forward to ensure clarity and support?

Post-Transition Communication: After the transition, employees should direct their questions regarding retirement benefits to the selected insurer's service center. Avery Dennison will provide contact details and further instructions in a welcome kit following the transition.

How does the U.S. tax legislation impacts the retirement benefits of Avery Dennison employees who are transitioning to a group annuity, particularly concerning taxation of these annuity payments during retirement?

Impact of U.S. Tax Legislation: The transition to a group annuity may affect the taxation of retirement benefits. Employees are advised to consult with tax professionals to understand the specific impacts based on their personal circumstances.

For employees seeking more information regarding the details of their retirement benefits and the implications of the insurer transition, how can they contact Avery Dennison to discuss their specific circumstances and gain clarity on any outstanding questions?

Accessing Further Information: Employees seeking more details about their retirement benefits post-transition can contact Avery Dennison through their designated Retirement Center or access information via the company's dedicated benefits website. This is crucial for obtaining clarity on specific circumstances and outstanding queries regarding the transition.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Avery Dennison announced a major restructuring plan that includes layoffs affecting approximately 10% of its global workforce. The company is also revising its pension and 401(k) plans to better align with current economic conditions.

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For more information you can reach the plan administrator for Avery Dennison at 207 Goode Ave Glendale, CA 91203; or by calling them at +1 626-304-2000.