As a savvy Florida resident, you know that Congress passed and President Trump signed into law the Tax Cuts and Jobs Act in late December. What you may not have asked yourself, however, is whether or not this new law affects your estate plan.
As Market Watch explains, the new law may well rid your estate of the need to pay federal estate taxes, the infamous "death tax" that plagued so many estates for so many years. Under the old law, your estate had to pay an estate tax if its value was over $5.6 million. Under the new law, that tax-free value is now $11.2 million. Since Florida does not have its own estate tax, this means that unless you are among the uber-rich, your heirs now get more than they would have had you died last year.
Married couples exemption
Before you become too complacent, however, and decide that you have no need to review your estate plan with your attorney, consider the fact that the estate tax exemption also doubles for married couples under the new law. This means that between the two of you, you can now pass $22.4 million to your heirs estate tax-free - but only if your respective estate plan documents contain the proper wording so as to invoke this portability aspect. Therefore, this is precisely the time to talk to your attorney.
Periodic estate planning review
Actually, estate planning experts recommend that you review your estate plan every three years or so to make sure it still meets your needs. This is especially true whenever you have a life-changing event such as the following:
- Marriage or divorce
- Birth of a child or grandchild
- Death of a spouse or child
- Sale of your business
- Receipt of a significant inheritance
In addition, should you or a family member develop a chronic illness or sustain injuries resulting in a permanent disability, this, too, could necessitate an estate plan update. This is general information only and is not intended to provide legal advice.