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New federal estate tax law may affect estate plans

Sometimes, the law changes in a way that might affect a person's estate plan. For example, back in December of last year, Congress passed tax legislation in a way that warrants a review of one's estate plan. With this in mind, there are certain questions a person may want to ask a professional, so they can determine how the new federal estate tax law affects them.

A person may want to ask how the new estate tax will affect them. The estate tax is levied by the government when a person passes away, meaning that once the government takes its share the value of one's estate is diminished. However, there are exemptions to this tax. It used to be that the estate tax only kicked in for estates valued at $5.6 million. However, with the new tax law, that amount has been raised to $11.2 million.

Another issue a person might want to learn more about is how the new tax law addresses the limit of the estate tax exemption for those who are married. Usually, one spouse will pass away before the other. When it comes to married partners, the issue of portability comes into play. It is important that, to invoke portability rules, the correct language is used in a person's will or trust.

A person will also want to know if the new tax law has any effect on the state estate tax. New Jersey is one of 15 states that taxes one's estate upon one's death. Professionals would be able to explain how the new federal tax law applies to New Jersey's estate tax laws.

As this shows, there are several reasons why a person will want to review their estate plan in light of the new tax law. Changes in life -- whether they are personal or external -- can affect one's estate plan, but with a careful review and understanding of the law, a person can ensure their wishes will be met.

Source: Forbes, "5 Questions To Ask Your Estate Planner After The New Tax Law," David Robinson, Jan. 9, 2018

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