Nobody really likes to think about either death or taxes, but the two are heavily intertwined — especially since the Tax Cuts and Jobs Act of 2017 went into effect. If you haven’t spent some time reviewing your existing estate plans to see what changes should be made to minimize any tax consequences since then, you should.
Here are some of the things financial experts are recommending that you do with your estate plans now:
- Review any trusts. Trusts are great tools for passing wealth on securely to the next generation — but some trusts became less useful due to the new laws. You could also run into state taxes that complicate your trust. A flexible trust strategy may be needed to accomplish some of your original goals.
- Look at spousal exclusions. Since 2010, one spouse has been able to “piggy bank” the unused federal tax exclusion left over from the other spouse’s estate. Since you and your spouse are unlikely to pass at the same time, that’s an important consideration.
- Find out more about how you can strategically use gifts to your heirs. Lifetime gifts to your heirs reduce the federal estate tax exclusion they receive — but there are ways to make that financial bite a little less painful.
Finally, it’s time to review all of your estate plans carefully for accuracy and completeness. That’s technically our suggestion — not something that the financial experts are saying — but it’s always a good idea to look at your estate plans every few years to make sure that they still reflect your current wishes. When things change, your estate plans should change with them.