Congress recently passed, and the President signed into law, the Tax Cuts and Jobs Act of 2017 (also known as the “TCJA”). The TCJA is a sweeping overhaul of the federal tax system with implications far beyond tax season. For example, there are significant modifications to the federal estate tax which could impact the estates of many residents in and around Brooklyn, New York.
The TCJA temporarily doubles the exemption amount for estate, gift and generation-skipping taxes from a base of $5 million (which was set in 2011) to a new $10 million base. The estate tax exemption literally means that a specific amount of assets maintained in your estate are not subjected to federal estate taxes. The new $10 million base applies to tax years 2018 through 2025. The estate tax exemption is indexed for inflation. As a result, an individual will be able to exclude $11.2 million in assets from federal estate taxes, according to Forbes.com.
Along with the doubling of the estate tax exemption, the TCJA impacts estate taxes for married couples. This is because there is another federal estate law known as “portability” that lets couples double the new exemption. So, for example, a married couple can now exclude $22.4 million in assets from estate taxation for 2018.
Now is the Time to Review Your Plan
Some individuals procrastinate and deflect the important conversation about updating their estate plan by claiming that they reviewed and updated their plan only a few years ago. This is faulty logic. Think for a moment – if a new medication were developed and released to the public, you probably would not ignore this innovation simply because your doctor prescribed a different medication a few years ago. The same issue arises when tax laws and trust and estate laws are modified.
You need to take the time to thoroughly examine your estate plan to ensure your assets are protected and take advantage of any new provisions that could benefit you and your loved ones. The common excuse for not addressing your estate plan because “nothing has changed,” certainly does not apply now as a result of the TCJA. This is one of the most dramatic overhauls of the federal tax system in 30 years. You could be exposing yourself to financial harm if you neglect your estate plan in reliance on old laws.
Contact an Experienced Brooklyn Estate Plan Attorney Today
As you can see, the TCJA significantly reformed numerous federal tax provisions that could impact your estate plan. This is why it is critically important to retain the services of an experienced and skilled Brooklyn trust and estate lawyer. It is important to understand that not all lawyers are created equal. You deserve the best.
The trust and estate attorneys with the Bukh Law Firm are recognized as a top-notch law firm that is focused on client-first representation. When you retain our firm, you become part of the Bukh family. Contact our office today to schedule an in-person consultation with a member of our team.