With every approaching payday in Columbus, you can count on one thing: the government taking its share of your earnings in taxes. Many clients come to us here at The Law Offices of Saia & Piatt Inc. concerned that the same thing will happen when the time comes to administer their estates. After having worked your entire lifetime to secure assets for your beneficiaries, how disheartening might that be to your family to see much of them eaten up by taxes?
Fortunately, that is something you may not even need to worry about. According to information shared by Forbes Magazine, changes enacted by the new tax bill signed into law in December of 2017 are expected to greatly reduce the number of taxable estates (to as few as 1,800, per some estimates). How? The law doubles the current federal exemption amount from $5.6 million to $11.2. What this means is that if the taxable value of your estate is less than that amount, it will not be subject to estate tax.
The potential good news does not end there. Estate tax portability still allows you to combine your exemption amount with that of your spouse, allowing both of you to protect a combined value of $22.4 million. You can do this by ensuring that you (if your spouse dies first) or he or she files an estate tax return the year that he or she (or you) dies electing portability. If you don’t, your unused exemption amount is lost. Furthermore, if you fail to elect portability, any assets you bequeath to him or her could push the value of your spouse’s estate above the threshold and make it taxable.
This current bill is set to run through 2025, so you should plan accordingly. More information on estate tax avoidance can be found here on our site.