Law Office of Sharon C. Stodghill

Call Us Today

713-464-6412

Estate tax implications could be part of Trump tax plan

Texans who have substantial portfolios will keep a close eye on tax implications for their estate after they have passed on. People who are leaving behind a lot in assets will undoubtedly want to protect their heirs from a major tax hit by engaging in estate tax planning. However, the estate tax is constantly up for debate in the federal government with some wanting to repeal it and others wanting to keep it in place. When drafting estate planning documents, having strategies to account for various contingencies can be key.

This is especially true as the Trump Administration prepares its tax reform plan with potential elimination of the estate tax. The estate tax -- also referred to as the "death" tax -- is expected to be part of the tax plan and reform. Since the federal estate tax counts assets like stocks, hard currency and real estate when it goes from the decedent to the heirs, there are limits when it is determined whether there will be a tax or not. Currently, there is a limit of $5.49 million for an individual and double that for couples. This is expected to change in 2018 regardless of the results of changes to taxes. Those who have accrued wealth can face hefty bills simply for passing their assets on to loved ones. Although, the estate tax affects a relatively minor percentage of people, it is still a consideration for those who have vast wealth.

The estate tax is just one aspect of what must be factored in when cobbling together a comprehensive estate plan. Other issues include the will and what should be in it, if a trust is a preferable vehicle, the kinds of wills and trusts that are available and useful, if there are minor children and a guardianship should be part of the process, and the distribution of the assets as well as the tax implications. Everyone's situation is different and having an estate plan is vital not just for those with large asset portfolios but for those who have less assets and want to ensure that their loved ones are taken care of after they are gone.

The estate tax is only part of the calculation when drafting estate-planning documents. Having legal assistance from start to end with an attorney who is well versed in the needs of all people whether they are wealthy or of lesser means is essential. Making the call is the first step to having an estate plan that is suitable.

Source: FOX Business, "Trump-GOP tax plan: The estate tax may soon disappear," Brian Schwartz, Sept. 25, 2017

No Comments

Leave a comment
Comment Information