Estate tax planning has taken a turn for the better for the very wealthy – new changes signed into law regarding Estate Taxes temporarily double the exemption amount for estate, gift and generation-skipping taxes (from 5 million to 10 million). This benefits anyone with over $11 million in assets, as it protects this money from taxes when it is given as a gift or transferred at death. As it stands now, very few individuals will be subject to a federal estate tax.
What If I Don't Have That Much Money? How Can Estate Planning Help Me?
We may not all be millionaires, but estate tax planning can still protect the assets you've accumulated. The federal estate tax revision also protects assets that you place in a trust. Trusts can be especially helpful to protect your designated heirs from estate taxes as well as ensure that money you choose to bequeath is used to enhance the receiver's life.
For instance, a trust can protect your assets from a marriage breakdown or other untoward influencers on your heirs. In addition, a trust protects these assets from creditors, and your beneficiaries can receive a managed income from the trustee. If you desire for a child's education to be paid for or partially funded, a trust can ensure that the monies go directly for tuition and expenses, rather than other things. The trustee can determine what would and would not be appropriate educational expenses.
It's Not All About the Money – Other Things to Consider
Estate planning doesn't stop at your will. Other things to consider are your end-of-life wishes, such as living wills and elder care options. Your estate planning documents should include financial and other powers of attorney, selection of a conservator, supplemental needs trust, and medical planning. Making these decisions now, while you are able, can simplify difficult decisions later.
If you aren't contributing the maximum to your retirement matching accounts, consider setting goals this year to increase retirement savings. Many retirement accounts are tax-sheltered – a professional tax attorney can help you determine which type of account fits your savings style best.
Estate planning isn't just for the heirs. Planning for retirement is part of a successful wealth management plan. Contact a professional tax attorney today to guide you through estate tax planning in 2018.