There have been a number of recent changes in tax reform that you will want to take into consideration this year. As part of the “Tax Cuts and Jobs Act” signed by the Trump Administration in 2017, there will be new requirements for estate plans starting in 2019. However, for many high-income earners, these changes will likely be given a warm welcome.
One of the biggest changes is the exemption for estate taxes will now be $11.18 million for an individual. For married couples, the amount is now $23.36 million. This means that you will not pay estate taxes on amounts that do not exceed those values before or after you pass away. However, these exemptions will go back to their previous values starting in 2025.
Similarly, the generation-skipping tax exemption will also now be $11.18 million for individuals and $23.36 for married couples until 2025. So, what do these changes mean for you? Fortunately, if you live in California, this means that you are able to gift money away to your heirs without paying estate taxes. Unfortunately, these new rules do not apply to every state in the country.
Estate planning can be complex, especially with the recent changes in tax laws. Even if you already have an estate plan in place, it can be beneficial to consult with an experienced comprehensive estate planning attorney to ensure your estate plan is up to date and you are receiving all potential benefits from the recent changes in tax laws.