The impact of the newest tax reform efforts will likely take a long time to settle in. However, there are many potential short-term changes that could impact retirees in the coming years. That means that reviewing and revising your estate plan could be an essential component of being prepared for the effects of new tax approaches. Recently, Marketwatch.com published an article giving some insight to some of these changes.
Changes to Property Tax Deductions
Under the new tax plan, only $10,000 of property tax can be deducted federally. That means that retires may more readily consider the impact this deduction has on their tax liability. Many retirees may consider moving from sates with higher property tax to ones with lower property tax in order to take advantage of the deduction but avoid spending additional money in property taxes that cannot be recouped.
Any change to property means a change in your estate plan. Not only do you need to revise your estate plan accordingly, but letting go of property could means preparing beneficiaries for what that means to them. This is especially true for a song or daughter that hoped to inherit a family home. Retirees could take the profit from a property sale and add it to their estate, or they may even want to transfer title to property to a beneficiary before moving elsewhere.
Changes to Government Benefits
Lawmakers at the federal and state level may start to consider changing the way certain government benefits work. With plans to reform programs like social security and Medicare percolating on the back burner, retirees may have to make some difficult choices when it comes to affording the cost of living and the cost of things like medical treatment.
As benefits change, so must a retiree’s approach to living. Long-term care insurance is an important aspect of retirement and responsible financial planning, but it could become even more essential depending on the reforms proposed and accepted. Changes in benefits can have a significant impact on liquid assets, and in turn on the assets within an estate. An experienced estate planning attorney can work with you to understand how these changes may affect you and what options you have in preparing for them.
Stock Market Growth
While the stock market is always a gamble, it does not seem to be slowing anytime soon and the article notes that many experts expect it to continue expanding. That is good news for investors, especially for those considering retirement. There are many important qualifications on retirement plans that individuals must consider when determining the type of investments to make, but taking advantage of the stock market and making changes that allow you to do so can not only have a significant impact on your estate but may require you to postpone retirement in certain situations.
Ultimately, comprehensive estate planning is not over when your documents are in place. As you and your circumstances evolve, so must your estate plan. These are only a few things to keep in mind when it comes to retirement and estate planning, but starting to think about how even small changes in social programs and big changes in the tax code could potentially impact you is a good way to make sure that you and your estate plan are ready for a future that can often seem uncertain.