Navigating Estate Planning Before the Election: What You Need to Know
The upcoming election could potentially bring changes to estate tax laws, making it a good time to consider modifying your estate plan. It is important to have an estate plan in place regardless of the election outcome. If your plan is outdated, this is an opportunity to update it and avoid common estate planning mistakes.
The Tax Policy Center predicts that there could be significant changes to estate tax laws, with the number of taxable estates potentially tripling depending on potential tax law changes. The Tax Cuts and Jobs Act (TCJA) made significant changes to estate tax exemptions, doubling the exemption to $11.18 million for individuals and $22.36 million for married couples. Currently, the exemption is $13.61 million per person and $27.22 million for married couples.
Depending on the election outcome, there could be further changes to estate tax laws. Democrats have previously proposed lowering the exemption amounts to $3.5 million or $1 million. One strategy to consider is making a large gift before the end of the year to take advantage of the current exemption amounts. Setting up trusts can also be an effective way to deal with changes in estate taxes and provide for future generations.
Even if you are not subject to the estate tax, it is still recommended to have an estate plan in place. Estate planning ensures that your assets are distributed according to your wishes and that your family is taken care of in case of unexpected events. It is important to review and update your estate plan regularly to ensure it continues to reflect your wishes and accommodates any changes in your family composition.
In conclusion, the upcoming election could bring changes to estate tax laws, making it a good time to consider modifying your estate plan. Whether you are subject to the estate tax or not, having a solid estate plan in place is essential for ensuring your assets are distributed according to your wishes. Keep in mind potential changes to estate tax laws and consult with qualified advisers to make informed decisions about your estate plan.