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Brief 2018 Estate Planning Update

Many of you may know that this year is a significant year of change to the exemption levels that apply for estate, gift and generation-skipping transfer taxes.  This update is a summary only.  Once you have read the following update, if you have any questions about how these matters relate to you, our estate planning attorneys will be happy to schedule an office conference with you to discuss what steps (if any) would be appropriate for you to take.  In addition, this may be an excellent time for you to review your individual estate plan and make any changes that are necessary.

The Tax Cuts and Jobs Act of 2017:

  • Raises the base federal exemption for estate, gift and generation-skipping transfer taxes from $5,000,000 per individual to $10,000,000 per individual. The base federal exemption is inflation adjusted for years after 2011, and is equal to $11,180,000 for 2018.
  • Continues estate and gift tax “portability” for spouses, effectively giving a married couple a combined exemption for estate and gift tax purposes of $22,360,000. Portability does not apply unless affirmatively elected by the first deceased spouse’s estate via filing of the proper information return (Form 706) with the IRS.
  • Provisions of the 2017 Act relating to estate, gift and generation-skipping transfer taxes (and individual income taxes) “sunset” automatically on January 2, 2026, absent Congressional action to extend (that means the current increases in the exemption may only be temporary).

Effect on Planning:

  • Married couples with documents requiring an irrevocable trust be created at the first spouse’s death may want to revise or eliminate that requirement.
  • A surviving spouse may want to terminate or modify an existing irrevocable trust.

Keeping Up With The Times:

Families and circumstances change and so do laws.  We recommend that you periodically review your estate planning documents to make sure that they continue to reflect your current planning goals.  In addition, we are continually improving and updating the provisions and language of our documents to keep up with changing laws and current practices.  Some of these changes could be important to you and your estate plan:

  • Making sure the right person(s) is named today to handle your affairs if you are unable;
  • Helping your family have a seamless transition if you become ill and at your death;
  • Revising provisions of all ongoing trusts for current income tax law;
  • Eliminating possibly onerous requirements to share trust information;
  • Refreshing powers of attorney or adding your choices for being cremated or buried;
  • Considering different state laws affecting your out-of-state vacation or business properties.

Article Written By: Jill D. Wiley

Estate Planning

Published 2/25/2018