The Tax Cuts and Jobs Act made many changes in tax law and below I discuss three major estate planning implications.
- The headline item is that the estate tax exemption is now $22.4 million for married couples and $11.2 million for single people. This means that the federal estate tax will be paid by even fewer Nebraskans. (But note that the Nebraska state inheritance tax is still the law. )
- Many couples planned for a bypass trust when the taxable estate amounts were much lower. That made sense at the time. But with the new higher estate tax exemptions maybe the plan should be revisited. When the second spouse in a bypass trust plan passes away the appreciated assets in it miss out on a step-up in basis. If the children want to sell the assets right away, they would take a large hit on capital gains tax.
- Because estate taxes are not an issue for most people the conversation with an estate planning attorney is focused on the wishes of the client. “It’s really helping to coach people through important decisions: How to make sure money isn’t squandered and aligning assets with values and visions, ” Brent Brodeski, CEO of Savant Capital.
Item three is our main focus and we learn about your vision for your assets in our Vision Meeting. You decide what estate plan is right for you.