Tax Cut & Jobs Act – Estate Planning Issues

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The Tax Cut & Jobs Act now provides each taxpayer an $11.2 million estate tax exemption {very unlike the MA $1 million threshold exemption applicable to Massachusetts residents} – doubling the exemption established by the Obama Administration.  Now is a good time for all clients to review their existing plans with their advisor team to ensure they have accomplished their goals, including:

  1. Probate Avoidance,
  2. Maximize Asset Protection,
  3. Minimizing income tax,
  4. Enhance retirement income,
  5. Accomplish incapacity/disability planning,
  6. Ensure your desired estate disposition,
  7. Protect against spendthrift or imprudent heirs,
  8. Provide for Special Needs heirs,
  9. Accomplish any charitable goals, and
  10. Complete or update your business succession plans.

For those ultra-high net worth folks who have the ability and desire to make substantial gifts to their heirs now, such a plan has the advantage of:

  1. Using some/all of their exemption now, avoiding the possibility of a Democratic Congress’s likely reduction of the exemption in the future, and
  2. Avoiding MA estate tax on the gifted assets and ensuing growth outside your taxable estate.

Such a gift(s) can be asset protected within a spendthrift irrevocable trust, as opposed to going outright to your heirs, and be subject to their divorce, bankruptcy, premature demise, incapacity and other factors that can arise, threatening the integrity of your planning. In fact, leverage gifting techniques exist for situations where folks wish to make enhanced use of the new gift/estate tax FED exemptions. Give Cleary Insurance a call to follow up on any of these ideas, so that you can make the most of this current change, and ensure your personal goals are indeed met in the most efficient manner.