It goes without saying that Floridians will want to make certain their loved ones are shielded and get the maximum of their inheritances when an estate plan is created. That can be accomplished through wills, trusts and proper implementation of asset protection strategies. For those with significant assets, the new Trump Administration tax plan was a boon when trying people were seeking to provide loved ones with large gifts and avoid onerous tax implications.
A concern about this, however, was that the exclusion was set to last for a finite period and would end in 2025. It had been believed that after 2025, the Internal Revenue Service would revert the tax to what it was before the change and people would be forced to pay taxes on their gifts. This was known as a “clawback.” Fortunately for those concerned about this, the IRS has stated in a proposal that it is not likely to move forward with the clawback.
The Trump tax change doubled the basic exclusion amount from what it was before. For 2018, single people will be shielded for up to $11.18 million. Married people will be protected from being taxed when getting twice that amount. With its recently released proposal, those giving these large gifts within the next seven years will not need to worry about the clawback.
The benefits for people who are formulating their estate plan to consider giving gifts to loved ones is that it will not be subjected to the estate tax. In general, this will be of benefit to people who have vast assets. Those who have smaller estates would be better-served to retain their assets and decide how to pass them on to loved ones in their wills, trusts or other device to be used after death.
Other methods to limit what heirs will pay can be achieved by discussing the goals with an attorney who specializes in estate planning, asset protection, shielding people from estate taxes and who will also understand how changes to the law impact the plan. Regardless of the estate planning needs, whether it is a living will, a will, health care designations, trusts, power of attorney and more, a law firm that specializes in estate planning can help.