AN UPDATE ON ESTATE PLANNING AND THE NEW TAX BILL

CHANGES YOU SHOULD BE AWARE OF REGARDING ESTATE TAXES

Increased Estate & Gift Tax Exclusions

Under Pre-Act law, the first $5.6 million of transferred property (as adjusted for inflation for 2018) was exempt from estate and gift tax. This translates to an exclusion for married couples in the amount of $11.2 million. The Act increases the amount of transferred property exempt from estate and gift tax to approximately $11.2 million per person (as adjusted for inflation). This translates to $22.4 million of exclusion per married couple. Additionally, the present interest annual exclusion amount for gift tax purposes for 2018 has increased to $15,000 per person. This is a $1,000 increase from the exclusion amount in effect for 2017.

Additional Estate & Income Tax Planning Opportunities

The significant increase in the estate tax exemption opens up the possibility of additional estate planning for people with larger estates. For others, the increased exemption means their wealth will no longer be subject to the estate tax. This is a great opportunity to review your estate plans with your attorney to be sure they reflect your intentions. Because of the Act, the language in your documents may require that trusts be funded with a far greater amount of assets than originally planned. Failure to have these documents reviewed in light of the changes in the Act may result in unintended consequences. Furthermore, you may want to take advantage of the increased opportunity to save additional estate (or income) tax.

For over 15 years Fairman Group Family Office has been providing financial planning, investment advisory, tax preparation and tax planning services to individuals and families in the Greater Philadelphia Region. Contact us for assistance with:

  • Design of wills, trusts, powers of attorney and healthcare directives
  • Lifetime gifting strategies
  • Asset protection planning
  • Business succession planning
  • Financial modeling

If you’d like to meet us to discuss your needs,
contact Marianne Inforzato, CFP®, Partner, or Walter Reed, JD, CFP®, CDFA™, Principal.