Tax laws used to play a major role in estate planning. Nowadays, not so much. The reason: Congress has greatly increased the exemption for the Federal Estate Tax.
- Current Exemption Levels. Today, if you’re single, and your estate doesn’t exceed $5.43 million, your heirs won’t pay a dime in Federal Estate Tax. And if you’re married, you and spouse can combine your exemptions; if your combined assets don’t exceed $10.86 million, your heirs will pay no Federal Estate Tax. (These numbers are adjusted annually for inflation.)
- How this Affects You. The bottom line is that only the very wealthy need to worry about burdening their heirs with a Federal Estate Tax bill.
- Estate Planning is Less Complicated. Did you set up a trust when the exemption amounts were much more modest? If you did, your trust may be more complex and wordy than is necessary. In the past, you had to jump through some technical hoops to reduce or eliminate the Federal Estate Tax.
- Simplifying Your Estate Plan. You might consider creating a new, streamlined trust that will be easier to understand and administer.
The attorneys at the Ann Arbor law firm of Hamilton, London, & Davis can review your estate planning documents and recommend ways to keep them as simple as possible – keeping in mind your goals.