New Year Estate Tax Exemption

For 2019, the IRS has announced that the lifetime estate and gift tax exemption amount has increased to $11.4 per person, or $22.8 million for a married couple. This means that an individual may pass $11.4 million in assets without facing federal estate taxes. Married couples may still pass assets to each other upon the death of one spouse free of federal estate taxes. The surviving spouse may then elect to utilize the deceased spouse’s exemption amount (called “portability”) which would allow the surviving spouse to pass up to $22.8 million in assets free of federal estate taxes.

The annual gift exclusion amount remains at $15,000 for 2019. This means that each individual can gift up to $15,000 to an unlimited number of individual recipients without cutting into their $11.4 million individual lifetime estate and gift tax exemption allowance .

Check out this 2019 estate tax update from Forbes for more information on 2019 estate taxes.

Make A Quick List, Check It Twice

Wondering where to start as you consider creating an estate plan? Thinking through this short and sweet checklist will give you a solid foundation for your estate plan:

  • Beneficiaries: Who will get your assets when you pass away? Friends, family, charities?

  • Specific Gifts: Do you have any special items such as family heirlooms or jewelry that you would like certain individuals to receive after you pass away?

  • Trustee: Who will manage assets on behalf of your children if you pass away while they are young?

  • Executor: Who do you trust to distribute your assets as you have spelled out in your will?

  • Financial Representative (POA): Who should make decisions regarding your finances and other personal business if you become incapacitated?

  • Health Care Representative (POA): Who should make medical decisions on your behalf if you become incapacitated?

  • Living Will: If you are in a terminal state as determined by a physician and unable to make decisions on your own, would you like to receive life-prolonging care, or would you prefer to receive comfort care only?

Best wishes for a safe and happy holiday season to you and your family!

New Year, New Tax Law

You have surely heard about the new tax legislation signed into law by President Trump at the end of 2017, but what does it mean for your estate plan?  Below are a few key changes to the tax law that can impact estate planning:

  • The annual federal gift tax exemption increases to $15,000 this year, to be adjusted for inflation each year thereafter.  This means that each individual can give up to $15,000 in gifts to as many individuals as they would like in 2018 without touching their lifetime exclusion amount.
  • The lifetime gift and estate tax exclusion amount increases to $11,200,000 for each individual as of January 1, 2018, and will increase with inflation each year through 2025.  This means that each individual can pass assets worth up to $11,200,000 during life and/or at death without incurring federal gift or estate taxes.
  • The lifetime exclusion amount is still portable, meaning a deceased individual's unused portion can be utilized by a spouse.  As such, the exclusion amount for a married couple for 2018 is effectively $22,400,000.
  • On January 1, 2026, the lifetime exclusion amount will drop back to the 2017 level ($5,490,000 adjusted for inflation) per individual.
  • The federal estate tax rate remains 40% for those who exceed the lifetime exclusion amount.

 

Wishing you all the best for a happy and healthy 2018!

4 New Year's Resolutions For Married Couples

Whether you are planning a wedding this year, or you have been married for 50 years, this helpful article from A Practical Wedding outlines four major planning discussions you should have with your spouse.  Writing your wills, purchasing life insurance, preparing living wills, and documenting various aspects of life can go a long way toward making an unexpected situation much simpler for your spouse or other loved ones to manage.

Thank you for a wonderful 2016, and best wishes for a safe and happy 2017!

What's New For 2016?

Welcome to 2016!  If getting your estate plan in order is one of your resolutions for the new year, take a look at this quick list of changes to 2016 estate planning law compiled by financial services company The Motley Fool.  Even if you already have an estate plan in place, it is helpful to understand how these changes could impact your estate plan. 

  1. The lifetime exclusion amount, or the amount of assets an individual may pass free of tax during life or after death, increases to $5.45 million in 2016.
     
  2. Individuals may give gifts of up to $14,000 to any number of individuals this year before the lifetime exclusion amount even comes into play.
     
  3. The federal tax rate for taxable estate assets is 40% this year.
     
  4. The lifetime exclusion amount is still portable, meaning spouses can utilize any unused portion of a deceased spouse's lifetime exclusion amount if the proper election is made.  As such, married couples can take advantage of a $10.9 million lifetime exclusion amount this year.
     
  5. Both Indiana and Ohio have done away with estate taxes, so state level estate taxes are not a concern for Indiana and Ohio residents this year.

Here's to a safe and happy 2016!

A Solid Estate Plan is the Gift that Keeps on Giving

Looking for a last minute gift idea for your family and loved ones this holiday season?  How about putting together an effective estate plan to protect them in the future?  The gift of a solid estate plan can save your family and loved ones time, money, and headaches down the road.  It is important to put in the time now to make sure your affairs are in order as mistakes in your estate plan can have devastating consequences after your death.  A piece on the website Financial Planning highlights ten major celebrity estate planning mistakes to avoid:

  • Appointing an untrustworthy trustee or executor
  • Failing to clarify intent
  • Putting off estate planning until it is too late
  • Making verbal promises outside of the plan
  • Failing to fund a trust
  • Failing to make documents accessible to loved ones
  • Creating unenforceable documents
  • Failing to update estate planning documents after major life events
  • Creating "do it yourself" estate planning documents
  • Failure to establish an estate plan at all

Wishing you a happy and safe holiday season and all the best in the new year!

Looking Forward To 2015!

As we begin a new year, I would like to take a moment to thank all of my wonderful clients for their business this past year!  Also, a huge 'Thank you!' to those who have provided word-of-mouth referrals to friends and loved ones.  Like any small business owner, I have the opportunity to do what I love because of the help of these referrals.  I have enjoyed meeting a number of fantastic people, and I look forward to what lies ahead.

Best wishes for a wonderful year, and in the words of Joey Adams, "May all your troubles last as long as your New Years resolutions."  Happy 2015!