April 16, 2018
On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act of 2017 (“The Act”). The Act affects Federal Estate Tax Laws. It doubles the integrated estate and gift tax exemption to an inflation adjusted $11,180,000 for decedents dying and gifts made in 2018. A married couple has the benefit of two (2) exemptions, for a total exemption of $22,360,000 in 2018. These exemptions will continue to be adjusted annually for inflation. Further, The Act doubles the exemption from the generation skipping tax in 2018 to $11,180,000 for an individual, and $22,360,000 for a married couple.
Unless there is further legislation to extend them these changes, unfortunately, will end after 2025. If they are not extended, in 2026, these exemptions will revert to an inflation adjusted amount that is currently estimated to be approximately $6 million per person or $13 million per couple in 2026 (assuming a 2% inflation rate between now and 2026).
Record high exemption amounts, even if just for a few years, creates a rare opportunity to take advantage of strategies for locking in those exemptions and permanently avoiding future transfer taxes
If your estate planning documents contain a clause or clauses with a formula related to the US Estate and Gift Tax Exemption or the Generation Skipping Tax Exemption, we recommend that you consult with us to review how these changes will affect your estate plan.
Other provisions under current law affecting estates and trusts, such as carryover basis, portability and estate and gift tax of non-residents remain unchanged.
Just because the possibility of estate tax liability seems remote for many families, it does not mean the end of estate planning as we know it. There are still many non-tax issues to consider, such as asset protection, care of minor children, family business succession, planning for those with special needs, as well as many other concerns, which makes the review of your estate plan still very important.
We look forward to discussing these changes with you. You may contact any one of us below.
Michael H. Krekstein 215-893-8740 firstname.lastname@example.org
Scott H. Mustin 215-893-8741 email@example.com
David R. White, Jr. 215-893-8742 firstname.lastname@example.org
Scott C. Mahoney 215-893-8720 email@example.com