Not long ago, the Federal Estate Tax Exemption (the amount you can give to others during your lifetime or upon your death - or a combinationof the two without implication of a tax) was increased. Today, in 2019, that Exemption amount is $11.4 million per person for U.S Citizens.
That Exemption however is set to expire on December 31, 2025 and revert to the prior law of $5 million per person with an index for annual inflation.  This is what the law currently says.
But we have an election upcoming in 2020.  Many are now speculating that, should the make-up of Congress become predominately Democratic and/or the President who takes power after the next election is a Democrat, the Exemption is likely to be shifted to some lower number. This means more taxpayers would be subject to Estate taxes at the Federal Level.  Many of the Democratic Nominees are proposing a lower exemption of $3.5 million per person.
Even if you believe this proposed Exemption shouldn't be of great consequence on your estate, remember that all life insurance (meaning the death benefits) owned by you will be included in your gross estate for estate tax purposes as well as your retirement accounts and other assets.
If the Exemption goes down, you will also want to make sure the Marital Funding Clause (for joint married couple Trusts) in your Trust still meets with your personal objectives.  And if your estate is, or is likely to be, larger than the Estate Tax Exemption - know that there are planning tools to help you reduce the risk of an estate tax down the road.
For more information on reducing the risk of estate taxes and protecting your family, call or text us for an appointment at 760-448-2220.
Be the first to comment!
Post a Comment