With the new tax laws coming into effect this year, even recent estate plans may be out of date, particularly for high-net worth individuals and couples.
Many financial and estate planning strategies are now outdated, as the exemption for the size of estates has risen to $22 million for couples, up from $11 million prior to the passing of the new tax bill. But even couples with less than $22 million in assets may not need to bother with some common estate planning tools such as life insurance trusts or credit-bypass trusts, according to Reuters.com.
Reasons to have a current and updated estate plan
Making sure your wealth is protected in case of an accident or other tragic event is still key. Most people should still be careful and mindful of how their wealth will be distributed after their passing. Without a current estate plan, your loved ones can become embroiled in long and contentious processes to inherit your property.
The new laws are a good reason to check in and make sure your plan is up-to-date. It also provides an opportunity to simplify it if possible. Even though the new law will sunset in 2025, you can still explore what options are available to you now.
An end to trusts?
So, do the changes in the law mean that trusts will now fall by the wayside? On the contrary, say attorneys and financial planners: you should still consider your long-term health and financial future when drafting estate plans. In particular, having power of attorney in case you are incapacitated is still of paramount importance.