The current makeup of the federal government makes it very likely that some type of tax reform will happen within the next couple of years. Many individuals that have comprehensive estate plans in place or are considering engaging in creating a comprehensive strategy may have questions about how such tax reform could impact their estate plan. Recently, WealthManagement.com published an article discussing some approaches to estate planning while waiting to see how tax policy develops.
Tax Policy and Your Estate Plan
You must not underestimate the potential impact that tax policy can have on your estate plan. For individuals with larger estates with values that surpass the current estate tax exemption of $5,490,000, taxes play an even bigger role. If your estate is valued above the estate tax exemption, you have a variety of tools at your disposal that can help you alleviate some of the financial burdens imposed by taxes. Perhaps you will utilize your annual gift exemption to distribute some of your assets during your lifetime. You may end up creating a trust and title some of your assets under the trust instead of in your own name. Whatever tools you utilize, and even if the value of your estate falls within the estate tax exemption, taxes play a crucial role in the design and implementation of your estate plan. An experienced estate planning attorney can and should help you understand exactly how taxes might affect your personal estate plan and can also help you stay abreast of new developments in tax and other laws that could impact your estate plan.