New Federal Tax Reform Estate Planning | Winning Strategies

Americans have been listening to talk this new Federal Tax Reform Estate Planning issue for months. Not a day goes by that this topic isn’t featured in a news story or discussed on the radio. So what does the new federal legislation -- the Tax Cuts and Jobs Act passed by Congress at the end of last year -- mean for your estate plan?

Federal Tax Reform Estate Planning Legislation

The tax reform passed by Congress at the end of 2017 implemented new levels for the federal gift, estate, and GST exemptions effective January 1, 2018. Specifically, the amount that may be transferred free of any taxes was doubled – to $11,180,000 for a single individual and $22,360,000 for a married couple -- and provides for annual inflationary increases.

It is important to note that this exemption level is only in effect for a set period of time. On January 1, 2026, the Tax Cuts and Jobs Act provisions concerning these exemptions revert back to 2017 levels, allowing for inflationary increases. The exemptions in 2017 were $5,490,000 for a single individual and $10,980,000 for a married couple.

Effective estate planning strategies take advantage of this opportunity

Effective estate planning strategies take advantage of the financial opportunities set forth in the Tax Cuts and Job Act. By acting now before the window of opportunity closes, you can effectively incorporate a few key elements to your overall estate plan, thereby maximizing your financial gain.

Estate planning measures include:
Incorporate new gifting levels as part of your overall strategy
Utilize trusts in your planned gifting
Combine gifting of assets and selling of additional assets
Structure spousal gifts to lifetime access trusts

Evaluate your existing estate plan

Estate plans should be reviewed whenever there is a major life change or change in finances to be sure that the existing plan addresses your current situation. Similarly, estate plans should be evaluated in light of the new federal tax laws. Formulas used in your existing plan may be outdated and changes in exemption levels may bring unintended consequences.

Estate planning tailored to meet your future goals

An effective estate plan is not based on a one-size-fits all formula. It is a customized strategy that incorporates several components tailored to address your financial situation, your family circumstances, and your long and short-term goals. From preparing a last will and testament, to designating durable powers of attorney and developing revocable living trusts, the estate planning specialists at Altman & Associates guide you through the estate planning process every step of the way.

Our experienced team discusses your concerns and your goals to design an estate plan that reflects your wishes. Contact one of our estate planning specialists today to arrange for a confidential consultation at 301-468-3220 or online. Altman & Associates has convenient offices in Rockville and Columbia.

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