Tag: tax laws changes

Estate Planning Tips Floridians Need When They Near the Proposed Tax Limits

Have you seen the  rise and fall in estate taxation rates making headlines these days? It seems to be more and more common, especially given the changes that often occur with new leadership at the federal level. Right now, the federal estate tax exemptions are so high that very few Americans need to be concerned with approaching the limits. The federal exclusion is approximately $11.7 million per individual person or $23.4 million for a married couple. Luckily for Floridians, the state of Florida does not impose any estate tax of its own in addition to the federal tax. Floridians who wish to be careful with their estate planning, however, may want to keep abreast of the proposed changes to the estate tax exemption at the federal level. 

 

The bill introduced to Congress in March proposes that the individual estate tax exemption be lowered to $3.5 million per person or $7 million for a married couple, reducing the current amounts by roughly two-thirds. Let us discuss some estate planning tips for Florida married couples who are nearing the proposed estate tax exemption limits.

 

You may want to consider creating a Spousal Lifetime Access Trust (SLAT). This is because different types of irrevocable trusts, such as SLATs, may exclude your assets from being subject to estate tax if you are nearing the federal estate tax limits. Keep in mind that once you put money into an irrevocable trust, you cannot take it back, so if you are just nearing the proposed federal estate tax exemption limit you may want to shield only the funds necessary for exemption in a trust. A Spousal Lifetime Access Trust may work for a long-married couple. The donor spouse makes a gift to the trust for the other spouse’s benefit. Any appreciation of assets gifted to the trust will be excluded from the estate of both spouses for tax purposes, removing the need for the surviving spouse to pay taxes on the capital gains. 

 

You may also benefit from filing a surviving spouse return when needed. For a married couple, the combined estate tax limit can be important. Any part of the current $11.7 million individual exemption, or potential future $3.5 million individual exemption, that is not used when the first spouse passes away can be carried over to the other spouse. When the second spouse dies, they can use up to the full amount of the married couple credit. This is referred to as a Deceased Spousal Unused Exclusion (DSUE). To obtain this benefit, the second spouse has to file a federal estate tax return (IRS Form 706) upon the first spouse’s death and make the accurate election. 

 

Do you have questions? Please contact our law practice to learn more. We are here for you. Elder and Estate Planning Attorneys PA is a law office small enough to provide personal service but large enough to provide service in Palm Beach, Martin, St. Lucie and Indian River Counties.

The New Federal Tax Law Offers Plenty of Reasons to Update Your Estate Plan

“When Congress passed the Tax Cuts and Jobs Act, lawmakers included a huge increase in the federal estate tax exemption., which now stands at $11.2 million through 2025, with adjustments for inflation. You may think because you don’t have that much money, you can put your estate planning on the back burner.

Anne Desormier Cartwright of Elder & Estate Planning Attorneys PA says that could be a mistake:

“”First, it’s always a good idea to review your estate plan, regardless of whether federal or state tax laws change. A marriage, a death in the family, or the birth of a grandchild are just a few other reasons to revamp your plan, not to mention if you’ve changed your mind since you last addressed your estate documents.””

There is no better time to get started than the beginning of a new year to update your plans with a trusted estate planning attorney. It’s critically important to craft legally sound paperwork to ensure your final wishes are followed, and your loved ones are supported through your lifelong work.

Elder and Estate Planning Attorneys PA is a law office small enough to provide personal service but large enough to handle all of your estate and planning needs. They are here to help you and your loved ones both now and in the future. Do not wait to contact them with your questions.”

Changes to taxes you need to know

Changing tax laws mean individuals and families need to keep a close eye on their estate planning techniques. “Tax planning that made sense when the federal exemption “sat at $675,000 per person a decade and a half ago, “doesn’t necessarily make sense today,” says Anne Desormier-Cartwright of Elder and Estate Planning Attorneys PA. Today’s federal basic exemption from gift and estate tax has increased to almost $5.5 million, and it’s scheduled to go up another $110 thousand in 2018. That means the rate for couples will be $11.2 million in 2018. Some types of trusts might no longer be beneficial from a tax-planning standpoint. A qualified financial advisor and estate planner will be able to guide you through the process of what will work best for you and your goals. Elder and Estate Planning Attorneys PA is a law office small enough to provide personal service, but large enough to handle all of your estate and planning needs.