ARTICLE: How to Plan for Estate Tax Changes

How to Plan for Estate Tax Changes

Recently, the federal estate tax has been popping up in headlines. While not usually subject to such buzz, the federal estate tax can have important implications for many Americans. Did you know that there are proposed changes that would significantly reduce the federal estate tax exemption amount, as well as increase the federal estate tax rate? A lowered exemption amount means even more Americans will feel the impact of the federal estate tax. Let us discuss how you can plan for these potential estate tax changes.

Early planning can be the most effective way to avoid significant tax implications down the road. To avoid the estate tax, you may have to maneuver assets so that they fall outside of your taxable estate. One way to do this may be to make lifetime gift transfers. If you can do without access to a gift amount and you have plans to leave a certain inheritance to a particular beneficiary, making a lifetime gift may be a good option. Thus, the asset is no longer included in your estate. If it is an appreciating asset, you will not have to worry about the appreciation value being included in your taxable estate.

You may also want to consider putting an irrevocable trust in place. Irrevocable trusts take many forms and can be helpful in removing assets from your taxable estate. A SLAT, for instance, is an irrevocable trust created by one spouse for the benefit of the other spouse. A spouse can gift assets to the trust and the trust will not be included as part of either spouse’s estate for estate tax purposes.

Our office knows how changes in the law can have a big impact on our clients and their plans. We are here to help you navigate potential changes and update your estate plans accordingly. Please contact us to schedule a meeting time.

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We at Roth Elder Law, PLLC, believe in providing services in a way that clients can easily understand and meaningfully participate in designing and maintaining their estate plan for their loved ones, as well as be assured that their plan will be administered according to their wishes.