Whether you are just starting to create your estate plan or you already have one in place, it is important to remember to continue to maintain it over time. The new federal tax laws may also have an effect on your wills, trusts and other accounts, particularly if your estate is of a higher value. Your estate planning attorney and financial advisors can help you understand how these new laws will affect you and your family.
In the past, the exemption limit for estate taxes was $5.6 million. Generally, the new tax laws eliminate federal taxes on estates worth $5.6 to $11.2 million, or $22.4 million for married couples. With regards to couples, if a spouse inherits money from the other spouse within the limit, the spouse does not have to pay estate tax on that amount. This is referred to as “portability,” meaning that the limits from the deceased spouse’s estate is portable.
States that have a state estate tax may also be effected by the new federal law, but Arizona is not one of them.
Even if you are unaffected by the new tax laws, it is important you make sure that your estate documents are fully customized to your wishes. Make sure that your beneficiaries are up to date on all your accounts and that your power of attorney documents include specific instructions on how to manage your finances if you become physically or mentally unable to do so yourself. Experts suggest you should meet with an advisor or attorney to review and update your estate plan at least every three years or after any major changes in your life.
Source: Forbes, “5 Questions To Ask Your Estate Planner After The New Tax Law,” David Robinson, Jan. 9, 2018
