The Tax Cuts and Jobs Act of 2017 changes nearly every aspect of estate plans and wills. There are many new opportunities to pass on your business, property, and other assets to be sure that it stays in the family.
Because of these changes, it is wise to re-visit your estate plan. It’s important to be sure that your wishes are well preserved, particularly if you have significant assets to protect for generations to come.
Generalizations are dangerous
Estate planning has never been a “one size fits all” situation. That is especially true when considering the changes which have taken place. Complex trusts are often built around a formula for distributing assets which necessarily varies based on your needs and the current law. With all the changes every trust calculation needs to be re-evaluated.
The most significant change is that the exemption from all taxes has been increased to $11 million for an individual and $22 million for a couple. This may make it much easier for you to pass on your entire estate intact, without a trust. That may be the best option if you have limited adult beneficiaries
Keeping your business intact
Some of the most significant changes occur in corporate taxes, including pass-through LLCs and partnerships. The income distributed from these entities is now subject to much less in taxes.
For estate planning purposes, there is a significant step-up in basis for valuation. This can be very significant, especially with Colorado’s relatively high tax rates.
Other important changes
There has also been a dramatic increase in the gift tax exemption, as well as for generation skipping transfers (GST). It is now much easier to provide for the immediate needs of grandchildren, for example, without a trust.
These are but a few of the many changes which are good reasons to evaluate your entire estate plan.
Where to start?
It’s important that you have an experienced estate planning attorney who listens to your needs and guides you through the changes in the tax code. This is not a time for tried-and-true formulas, but rather a chance to fully re-evaluate your wishes and how they can best be carried out.
There are many new tools for you to protect your assets for future generations. A good plan will make sure this happens with the least division among your family.