REVISING ESTATE STRATEGY ASSUMPTIONS

Every time rules and regulations change, it throws things into a spiral of reactions. With the introduction of the 2017 Tax Cuts and Jobs Act, things have stabilized a bit, but you might want to consider changing your estate strategies to ensure they line up with your goals.

The estate and gift tax exemption was raised to $11.2 million by Congress, and thus many more people may be able to pass assets completely free of estate taxes. This means everyone, including you, should take a look at their current strategy and adapt it accordingly if it qualifies for the new exemption rate.

Changing Gift Strategies

With these changes, it has become viable for some estates to retract from gifting assets. This is due to the fact that you lose the tax advantages of the step-up cost attached to an inherited asset. Now that more assets are excluded from the estate tax, take some time to reconsider any asset gifts – unless a present need would benefit from the gift, it may make more sense to pass the assets via your estate.

Joint Ownership

Individuals should consider re-titling assets to utilize the step-up once the first spouse passes away. These could allow considerable savings on capital gains taxes once the asset is sold.

Changing Up Trust Strategies

Now spouses do not need to worry about maintaining a trust to take advantage of both spousal exemptions. This means those who already have an established trust should review it to make sure they are not missing out on the step-up.

Guidance is Crucial

It takes time to navigate the changes from a massive tax regulation change like the 2017 Tax Cuts and Jobs Act. There is no better time than today to call FSG for more information on how those changes affect your estate plans and strategies. We’re here to guide you through the possible outcomes of leaving your plan as is or restructuring them to meet your needs.