Tax Cuts And Jobs Act
Explore how the Tax Cuts and Jobs Act impacts estate planning, focusing on changes to estate taxes and implications for trusts.
How did the Tax Cuts and Jobs Act affect estate tax exemptions?
The Tax Cuts and Jobs Act of 2017 significantly increased the federal estate tax exemption, doubling it from $5.49 million to $11.18 million per person starting in 2018. This adjustment allows individuals to transfer a larger portion of their estates without incurring federal estate taxes, which can be particularly beneficial for high-net-worth individuals planning their legacies. However, this change is temporary, with provisions set to expire in 2025 unless further legislative action is taken. This increase provides strategic opportunities for estate planning, particularly for those considering setting up family trusts to maximize the use of these exemptions. Understanding these changes can be crucial in forming an effective estate plan that minimizes tax liabilities while maximizing asset protection.
