Update on Estate Planning and Taxes

{3 minutes to read} Recently, the House created a new proposal for estate tax. Over the next few months, many other taxes are going to potentially be changed and by the end of the year, we are more than likely to have sweeping tax law changes. So, this article is an alert to take advantage of the current rules that are in effect now, before these potential year-end changes.

Some significant changes are outlined in the article I’ve attached to this blog, but as a general rule of thumb, the big thing that I want to point out is the reduction in the ability to transfer huge amounts of wealth tax-free.

Currently we are at an $11.7 million exemption for each individual. What the House Ways and Means Committee has outlined in this new proposed tax law change is to cut that in half.

There’s also the reduction in the amount of money that you could gift, where it was unified to the exemption amount for leaving money in your estate, there is a possibility that there may only be the ability to gift up to $1 million. This is significant because it is a “use it or lose it” time for people who want to take advantage of the current laws and have the ability to make significant gifts. If you are in that position you may want to consider making these gifts prior to these laws going into effect.

Even if no tax law is changed, the $11.7 million exemption, which gets adjusted for inflation each year, is due to sunset and revert back to the Obama Administration amount, which will be about half of the current amount.

So please heed this alert and recognize that there is an opportunity, now. In 2009, at the last minute, people realized they were going to potentially lose some tax benefits, and had to rush to update their estate plans. Before they place this into law and you have a deadline, my suggestion is to review your estate plan and take a look at what you might be able to get growing out of your estate, thereby minimizing the loss of wealth to your heirs.

If there’s anything we can do to be of help, give us a call or send us an email.

Read: House Estate Tax Proposal Requires Immediate Action

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