2017 is quickly becoming a thing of the past, and 2018 is all the rage. Optimism and goals reign, as does uncertainty. We are all coming to grips with Congressional tax reform and how it might impact our lives. Here are a few estate planning changes that we know will happen and what else we need to be aware of for 2018.
● The Death Tax
The Tax Cuts and Jobs Act, passed and signed at the end of 2017, and beginning for 2018 doubles the death (or estate tax) up to $11.2 million per person and twice that for a married couple. That makes the estate tax an even less concern for most Americans. Additionally, this exemption rises with inflation, so this amount will go up every year. This change is not permanent however, but will sunset at the end of 2025. It is possible for Congress to extend this sunset, but Congress may not either. If it does sunset, the estate tax will essentially be halved.Tax reform is essentially making tax planning a less important part of estate planning, making the focus more on your goals, values, and your family relationships. If you have an estate plan that was created under the old rules (or the rules before that), visit with us to discuss how your estate plan might need to be changed to maximize how personal it is to you and your family.
● Incapacity Planning
What happens if you get in an accident but you do not die? Or, old age and mental disorders slowly claim your mental functions? When most people think about estate planning, they think about death planning, not incapacity planning. It is still vital to have adequate incapacity planning, which should include powers of attorney, a living will, and a HIPAA Waiver. If you do not have this as part of your plan, it needs to become one.
● Giving your family lifelong financial security
You may not think that you have a lot of money, but an IRA or life insurance policy may actually have a lot of value. These assets could provide a lot of financial stability for your family after you pass, but only if you create the right structures to avoid taxes, reduce fees, and protect from financial mismanagement or creditors. An estate planning attorney can help you create those structures and help you provide for your family even after you are gone.
● Fixing broken or old trusts
If you are the beneficiary of a trust, that trust may be old, difficult to administer, and even obsolete. The law provides mechanisms to update trusts under certain circumstances and in certain ways. You should work with an attorney to identify the best strategy to meet your needs and modern law.
Estate Planning for 2018
Estate planning is all about protecting and providing for family, and 2018 will be no different. Contact The Rains Law Office or schedule a complimentary initial meeting to start a conversation about how you and protect and provide for your family.