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Texas estate planning may be affected by new tax rules

Many of our readers in Texas may feel that the rules for estate planning are complicated. This has been especially true in recent years due to the ever-changing laws for issues such as the federal estate tax. Now, Congress has enacted a new set of laws aimed at making some of the more complicated estate planning considerations easier for some to understand.

As a part of the headline-making fiscal cliff deal, Congress agreed to pass the American Taxpayer Relief Act of 2012. This new set of laws makes changes to the estate planning rules that could affect the plans of those of us in Texas. Among the changes are the permanence of the exemption amount and the portability of the exemption.

In estate planning, people have had to deal with a changing amount for the estate tax exemption for more than a decade. As many may recall, the amount was set to reset to past levels if Congress did not make a deal. Luckily for many, Congress made a deal that set the amount for the exemption at $5.25 per individual.

In addition, Congress allowed of the exemption to benefit widows and widowers in a new way. New to the rules is the portability of the exemption. This means that if a spouse passes away, their surviving spouse can make use of the remaining amount of their exemption. This can save heirs large sums when the second spouse dies as well.

There are many different estate planning tools that can be used to customize a plan in Texas. To ensure that the proper ones are selected, a careful review of all options may be considered. This effort will pay off for a family when the heirs and survivors are able to make use of the new tax rules that have been created by the federal government.

Source: Forbes, “A Married Couple’s Guide To Estate Planning,” Deborah L. Jacobs, Jan. 9, 2013