One question that clients frequently ask is “How often should we review our estate planning?” Although a comprehensive estate plan should not require frequent, extensive review, we recommend regular, periodic reviews of your core estate planning documents (will, revocable trust, financial power of attorney, advance health care directive) to ensure the documents accomplish your current objectives, especially if your circumstances or wishes have changed.
You should also consider the potential impact of changes in tax laws on your estate plan. Under a 2017 law, the federal estate, gift and generation-skipping transfer (GST) tax exemption amounts were temporarily doubled (see “Tax Cuts and Jobs Act: Impact on Estate and Gift Planning,” Pasternak & Fidis Reporter (Spring 2018)). For 2020, the exemption amount is $11.58 million and is adjusted for inflation. In 2026, the exemption amount is scheduled to decrease by half unless Congress acts between now and then. The tax rate on estates, gifts, and GST transfers above the exemption amount is 40%. There could be significant revisions to the federal transfer tax laws even before 2026. In any event, there is no assurance that the increased exemption will be made permanent. In light of the current law, in certain situations it may be beneficial to modify existing estate plans or to make lifetime gifts to new or existing trusts for the benefit of children, grandchildren, or other beneficiaries to take advantage of the historically high exemption amount.
Here is a checklist to help you review the state of your planning.
If you answered “yes” to any of these questions, then it may be time for a review of your estate plans.
One of the largest expenses a family will incur is very likely the cost of a child’s education. In order to encourage early participation in saving for education expenses, Section 529 of the Internal Revenue Code permits states to provide tax-advantaged savings plans (“529 plans”). A 529 plan account may be used to help pay for a beneficiary’s tuition […]
In December 2017, Congress rushed to pass the Tax Cuts and Jobs Act: a 503-page document that drastically alters several of the popular tax credits and deductions around which many divorcing families structure their financial planning. This first major tax reform in decades affects taxes beginning in 2018 and will have a significant impact on […]
The Tax Cuts and Jobs Act (the “Act”), signed into law at the end of December, includes major changes to the Internal Revenue Code. The Act is the most sweeping tax legislation to be enacted in decades and affects nearly all American taxpayers. Under the Act, the federal estate, generation-skipping transfer (GST) and gift tax […]
The doubling of the federal estate tax exemption under the Tax Cuts and Jobs Act—from $5.49 million in 2017 to $11.18 million in 2018 ($11.4 million as of January 1, 2019)—has moved many wealthy Americans away from the impact of the federal estate tax. However, state estate taxes and state inheritance taxes remain a factor in estate planning for residents of […]
Lawmakers in Minnesota are acting quickly to pass the PRINCE Act, which is intended to protect one’s – specifically, Prince’s – name, voice, and likeness from unauthorized use for a 50-year period after death. The law is aimed at protecting Prince’s legacy and the right of his estate to control future marketing of and revenues […]