As of January 2019, the federal Tax Cuts and Jobs Act officially became law and introduced sweeping changes affecting taxpayers in Florida. Provisions of the law can affect your existing estate plan in many different ways, so much so that it may be necessary to update or revise the plan you have in place. The most obvious provision pertaining to your plan is the increased estate tax exemption, but, according to The CPA Journal, the new law also affects insurance, investment locations and other decisions related to financial planning.
The TCJA increases the amount of property exempt from estate taxes. For people whose estate exceeds the minimum value requiring the assessment of the tax, as well as their heirs, this is of significant importance. If you are in this group, however, you should be aware that the provision is temporary and set to expire in 2025.
Even if your estate is too small for the tax to apply, it is still a good idea to review your estate plan in the wake of the TCJA. Both the new law and your estate plan likely extend far beyond the scope of an estate tax, and other provisions of the law may have unintended and undesirable effects on your existing plan. The time to find that out is now, not after you have passed on and your heirs are facing the consequences.
The TCJA may also play a factor in decisions regarding life insurance. You may have initially taken out the policy to cover any estate tax owed. With the exemption increase, you may wonder if it is still necessary to maintain that policy. However, because the provision increasing the exemption is temporary, it may be a good idea to keep the policy in place in the event that your death occurs after the expiration date.
The information in this article is not intended as legal advice but provided for educational purposes only.