Illinois residents who have significant assets and are drafting estate planning documents will have various concerns about how their loved ones will be taxed should understand various strategies to protect their wealth. This is where wise and proactive estate planning comes in. When preparing an estate plan based on the current financial climate and how the government views its role in taxing citizens, it is also important to plan for years to come.
One issue that had been cloudy has been clarified by the Internal Revenue Service and those with vast portfolios should address that in their estate plans. The Trump Administration's new tax laws increased how much would be exempt when a person gifted it to another. For single people, it rose from $5.49 million in 2017 to $11.18 million in 2018. Couples receive double the exemption. People who had structured their estate plan around the new tax laws likely accounted for the expiration of the increase, set for 2025 when it would revert.
However, the IRS says such a move will not be made and there will be no reversion to previous levels once the Trump tax laws expire in 2025. For wealthy individuals who were set on ensuring their loved ones did not get saddled with a major tax bill, this is welcome news. That change - known as a "clawback" - sowed uncertainty when people put their estate plans in place and tried to account for their wealth and keeping it within the family with potential changes in the coming years. The individual gifts remain limited and currently the exclusion stands at $15,000. There will be hearings on the rule in March 2019.
Estate planning is important for everyone and not limited to wealthy individuals. But there are certain issues, such as the expiration of the estate tax change, that should be of concern to people who have major assets. When there are factors people are considering with their estate plan such as which device is best, how to implement it and what suits their needs in the best possible way, it is crucial to have legal assistance. A law firm that helps people with their estate planning needs should be contacted immediately to get the document in place and be prepared for the future.