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Five questions to ask your estate planning attorney about the new tax law

Bill Cass, CFP®, CPWA®

Bill Cass, CFP®, CPWA®, 09/11/18

The 2017 Tax Cuts and Jobs Act raised the lifetime exemption for the estate and gift tax to approximately $11.2 million for individuals — up from $5.5 million — and to roughly $22 million for married couples.

According to estimates, only 1,000 estates in 2018 will exceed the exemption limit, compared with 4,000 prior to the new tax law.

Still, estate planning involves a range of strategies beyond taxes. Investors may want to consider discussing these topics with an estate planning expert. Here are some questions that relate to the tax reform law:

1. Due to the recent tax law changes, do my estate planning and trust documents need to be updated?

2. With the dramatic increase in the lifetime exemption amount (from roughly $5.5 million to over $11 million per person), does it make sense to consider a sizeable gift to heirs now? If so, what are some options for structuring a gift (outright, through an irrevocable trust, etc.)?

3. Given the current estate and gift tax environment, what are the pros and cons of gifting assets to heirs while I’m living versus transferring assets to them upon my death?

4. Under the current law, few taxpayers have to worry about federal estate and gift taxes. Do I need to be worried about any taxes on transferring wealth in my state?

5. What is the portability provision, and how has it changed with the recent tax law?

Estate planning still needed

Although fewer estates will be subject to an estate tax under the new law, estate planning is still important for investors. In addition to basic documents, an estate plan can cover asset protection and advanced strategies such as trusts. Changes to estate and gift tax law require a thorough review of existing plans.


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About this blog

Financial-planning experts Bill Cass and Chris Hennessey weigh in each week with a range of insights about complex financial planning needs.

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