Anticipating Tax Reform with Your Estate Planning Strategies

The current makeup of the federal government makes it very likely that some type of tax reform will happen within the next couple of years. Many individuals that have comprehensive estate plans in place or are considering engaging in creating a comprehensive strategy may have questions about how such tax reform could impact their estate plan. Recently, published an article discussing some approaches to estate planning while waiting to see how tax policy develops.

Tax Policy and Your Estate Plan

You must not underestimate the potential impact that tax policy can have on your estate plan. For individuals with larger estates with values that surpass the current estate tax exemption of $5,490,000, taxes play an even bigger role. If your estate is valued above the estate tax exemption, you have a variety of tools at your disposal that can help you alleviate some of the financial burdens imposed by taxes. Perhaps you will utilize your annual gift exemption to distribute some of your assets during your lifetime. You may end up creating a trust and title some of your assets under the trust instead of in your own name. Whatever tools you utilize, and even if the value of your estate falls within the estate tax exemption, taxes play a crucial role in the design and implementation of your estate plan. An experienced estate planning attorney can and should help you understand exactly how taxes might affect your personal estate plan and can also help you stay abreast of new developments in tax and other laws that could impact your estate plan.

Waiting on Tax Changes offers ten suggestions for estate planning while waiting to see how tax policy evolves. Each of those suggestions can be discussed with an experienced estate planning attorney at Ettinger Law Firm as they could benefit your individualized estate plan. However, there are some important generally applicable reminders that everyone should take note of.

The first and likely most important takeaway from the article is a reminder to build flexibility into your estate plan. While the future of tax policy remains uncertain, several mechanisms can make your estate plan more fluid and able to adjust itself to various changes in tax law. For instance, if you create a trust it is important to allow the beneficiaries or trustee to retain limited powers of appointment. Doing so will allow your beneficiaries or trustee the ability to decant the assets within the trust into a new trust created in a more tax-friendly environment. If you are considering creating a trust, ensuring that you create a revocable trust that allows you to reorganize it should doing so become necessary is also an important.

Along the same lines, choosing an experienced estate planning attorney that offers services which allow you to monitor and update your estate plan should changes occur is crucial. Some estate planning firms do not offer to update clients on important changes, but Ettinger Law Firm’s client-centered focus allows us to maintain a relationship that keeps you abreast of important changes in tax policy and other areas of law that could impact your estate plan.


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