Almost one year to the day that Donald Trump was inaugurated as the 45th president of the United States, the American Congress passed a series of new tax laws that might affect estate planning around the country. It is always a good idea to have an annual meeting with your estate planner to go over any changes in your life or in the legal structure of estates that might require attention, but this is especially true when it comes to years when there are sweeping new tax laws. The new laws passed in January 2018 are very comprehensive, and your estate could be affected.
Estate Tax Exemptions
Prior to the new laws, estates valued at $5.6 million or less were exempt from estate tax. The new law now raises that limit to $11.2 million for individuals and $22.4 million for couples. This is going to help people with more wealth to pass on their estates without the burden of taxes. The reality is that doubling the estate tax exemption limit is not going to affect most Americans, but it will help those who have a lot of financial resources to pass down their estates with less consequences.
Estate Tax Limits
As of 2018, 15 states are still using estate tax. A portion of those states have their estate tax limits tied directly to the federal limits. Since the estate tax at the federal level is going up, those states that are linked to the federal amount will raise their estate tax as well. You will need to consult with a financial expert or call your state government to find out if your state’s estate tax is tied to the federal limits. The states that are not tied to the federal estate tax will not see any increase in 2018.
Comprehensive estate planning requires a great deal of customized paperwork and input from the estate owner. If you used a boilerplate estate set-up on a website, then there is a good chance that some of your stipulations no longer apply because of the new tax laws. Boilerplate estates can be dangerous and can leave out many of your final wishes. It is always best to get your estate done by a professional, and it is also important to take an active role in providing information your estate planner needs to create the estate you want.
In January 2018, the United States Congress passed a tax law that can directly affect thousands of estates all over the country. While the new laws might not affect your estate directly, the only way to be sure is to get your estate reviewed by a professional and be certain. The new tax laws might benefit your estate, or they might cause you to have to make drastic changes. Either way, it is important to attend to your estate now to avoid problems in the future.