Some events trigger a need to update your estate plan. Most of those events are changes that happen in your personal life, like marriage, divorce, the death of a family member, or the birth of a child. There is one notable exception, though, which triggers a need for just about everyone to revisit their estate plan and update it if needed. Changes in the tax laws that affect estates went into effect in January of 2018. This means that everyone with an estate plan must now assess whether and how those changes would affect their estate plan and take action if necessary to ensure that their estate plan can meet their estate planning goals in light of the new tax laws. If you do not yet have an estate plan, now is a great time to make one because your plan will account for the new tax laws.
One of the most significant changes in the estate tax law is that the exemption amount, the maximum value that an estate can have before incurring any estate tax, has increased dramatically. For example, married couples used to incur estate tax as soon as the value of their combined estate exceeded eleven million dollars. Under the new tax law, couples can have an estate worth twenty-two million dollars before any estate tax gets paid. The increased size of the estate tax exemption means that many people no longer need to use some of the estate planning strategies that people have used for years to avoid paying estate taxes.
An estate plan is still an absolute necessity because estate planning is the means by which you can assure that the resources that you own will go to the beneficiaries that you want them to go to upon the event of your passing. Under the new tax laws, many people can have more straightforward estate plans, without bells and whistles like credit-bypass trusts, life insurance trusts, and qualified terminable interest property (QTIP) trusts that get used to lower the amount of estate tax that gets paid. Simplified estate planning focuses on basics of your estate plan, things like powers of attorney and advance directives, that will keep you and your finances healthy during your lifetime and accomplish your estate planning goals when you pass away.
While you’re updating and possibly simplifying your estate plan, check your beneficiary designations on all of your accounts, such as 401(k)s and life insurance policies. As you update your estate plan, your attorney will help you select the estate planning tools that match your estate planning goals, including keeping as many things as possible out of probate, whether you need to concern yourself with estate tax or not.
To learn more about estate planning, call Wichita attorney J. Joseph Weber at 316-265-7802. or contact us on our website. We have appointments available from Monday through Friday, between 8 a.m. and 5 p.m., and we occasionally offer appointments in the evening or on the weekend.