Estate planning laws have always been complicated, and some of you may not even know that the laws are a little bit different in 2018. In particular, the estate tax exemption has been raised to $11 million if you file as single. If you’re married, it may have been raised to $22 million based on your selections during planning.
Before the new law, it was thought that the tax might be eliminated altogether. That turned out not to be the case, and for most of us the differences won’t matter. Estate planning is for the wealthy. Most people who need estate planning or probate help use simpler, easier services that making writing up wills and trusts a lot easier.
There is an annual amount that you can exempt from taxes by declaring it a gift. You can declare this tax exemption because you are, in effect, choosing to let your assets diminish by the amount of the annual gift, which helps your unified lifetime credit for gifts go up each year. If single, you can “give” away $15,000. If married, the amount increases to $30,000. Believe it or not, you can do this without filing any gift tax returns. You only need to do this when you give a gift that exceeds the maximum gift allowance.
Even so, there are things you can do in order to relieve yourself of the estate tax. If you choose not to engage with estate planning services, then you should realize that any family you leave behind will be forced to endure the probate process, which is basically the court’s decision. Extensive estate planning will help avoid that process, and grant you the power to do what you want with the assets you earned after a lifetime of work.
The 2018 law doesn’t change much else about the estate planning process. Keep in mind that each state has its own estate planning tax laws, which might reduce, increase, or eliminate the tax altogether. In order to find out how estate planning can work for you, consult with a qualified attorney as soon as possible. There’s no such thing as planning for the future too early.