Thursday, May 3, 2018

A-Z of Estate Planning

M – “M” stands for MARRIAGE. Perhaps more than any other single factor, MARRIAGE, RE-MARRIAGE, and DIVORCE (See, DIVORCE, above) can have a significant impact on the amount of taxes owing on an estate.  Under current tax law, a married couple can leave a combined estate of $22,400,000 and not be subject to estate tax. (This assumes the couple has not used any portion of their lifetime gift exclusion at the time of their respective deaths).  For an individual, that amount is cut in half.  RE-MARRIAGE, especially where there are stepchildren from a prior marriage, can require careful drafting of the estate plan to ensure children from the first marriage are not overlooked.

N – “N” stands for NEW TAX LAW.  As mentioned earlier, the tax law that took effect this year, and will remain in effect until the end of 2025, doubled the amount of an estate that will be subject to tax at an individual’s death.  This will have a significant effect on estate and tax planning during this time, and is anticipated to have a positive impact on the transfer of family businesses that have, in the past, faced difficulties passing the business to the next generation due to tax burdens.


O – “O” stands for ­OUT-OF-STATE-PROPERTY. If you own property outside the state where you establish your trust or where you reside, it is important, when funding the local trust with OUT-OF-STATE property that the deed transferring the property meets the requirements of recording where the real property is located.  If it does not, there is the risk that the property may end up in probate, rather than in your trust. 

To Be Continued ....................

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