If you have a reasonable amount of wealth that you’d like to pass on to your heirs without taxes taking a significant amount of that wealth from them , then you should be aware of potential changes to the tax laws under the new administration.
Trusts could provide a vehicle to shelter your wealth and easily transfer that wealth to your heirs. Moreover, if you hold your property in a living trust, then your survivors won’t have to go through probate court, which can be a time-consuming and expensive process.
For the 2021 tax year, the exemption is $11.7 million for individuals and $23.4 million for couples. As long as your estate is valued at under the exemption amount, it will not pay any federal estate taxes.
The new administration has expressed an interest in lowering the estate tax exemption. It could be lowered to $5 million or even reduced to the previous exemption of $3.5 million for individuals. Wealthy families still have time to revisit their estate plans as these changes are predicted to take place in 2022.
Moreover, states such as Ohio may be inclined to follow federal law and increase estate taxes taking even more money from your heirs.
You can read more at CNBC with their recent article here>.
If you are concerned about these rules changing, a trust may be a good way to protect your estate. Property in a trust passes outside of probate, and there are specific types of trusts that are designed to protect assets against estate taxes and capital gains.
Nobody enjoys estate planning, but it is necessary. The first step is to make a list of all of your assets and goals before talking to an attorney. Your assets include investments, retirement accounts, insurance policies, business interests, real estate and more.
Talk to an experienced, central Ohio lawyer at Painter & Associates about what type of estate planning and trust is right for you and your family.