The New Tax Law & Your Estate Plan
By Carl A. Glad, Partner, Law Offices of Kurt M. Ahlberg
On December 22, 2017, the President signed the Tax Cuts and Jobs Act impacting almost all aspects of the tax code. Those changes have also impacted Estate Planning.
A major change has been made to the Federal Estate and Gift Tax. The law increases the exemption for individuals from $5.49 million to $11.2 million through 2025. For Estate Planning purposes, this means that individuals can make much larger gifts throughout life. Those gifts can be to individuals and trust and can include transfers of real property and forgiveness of debts. More importantly, this means that individuals that had created Wills in the past must review their bequests. Those older Wills may include generation skipping trust, A/B trusts, and QTIP trusts. These trusts would have preserved a large share of assets for a surviving spouse, however, under the new law you may unintentionally provide for your children and not for your spouse.
It is important to remember that Connecticut retains a much lower Estate Tax exemption. While the exemption has increased to $2.6 million and will increase in 2019 to $3.6 million and again to $6.1 million in 2020.
These changes make in very important that you review your Estate plan with an attorney and accountant.
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