Most of the talk around tax law changes has been evolving over the past year with concerns about shifts in the estate tax exemption limit. If those changes do get adopted, you might need to make adjustments to your existing estate planning strategy.
There are many different tax changes proposed in President Biden’s Build Back Better Plan. These could significantly decrease the volume of wealth you can leave behind to your family, making it all the more important to schedule a meeting with an estate planning lawyer. Estate planning is so important at this moment because it’s also the end of the year and changes might have happened in your life over the past year warranting an update in your estate planning documents.
For example, perhaps you’ve gotten married or adopted or had a child. Right now the proposal includes a gift and estate tax exemption that would cut current numbers in half. As of right now, if your estate is worth less than $11.7 million you won’t pay gift or estate tax and anything over that amount gets taxed at 40%. However, under new proposed plans the exemption would be decreased to $5 million with all taxes being implemented on transfers and deaths after December 31st, 2021.
It is vital to meet with an estate planning lawyer to talk through your options. Your estate planning lawyer can advise you about some of the common pitfalls and challenges that you might expect and how you can pivot your existing estate plan to protect your interests.