For the first time in over three decades, the countdown to the New Year coincided with a countdown to massive changes in the Tax Code. The Tax Cuts and Jobs Acts affects tax payers in a multitude of different ways. To get a handle on these changes in 2018, taxpayers and business owners should consult with their attorneys or financial advisors to see how the new laws might impact their estate plan. Individual taxpayers may also consider additional gifting. Since the changes to the estate and gift tax exemption thresholds were written to expire, the present may be the best time to transfer assets to designated beneficiaries before the law changes again. It is also important to consider basis planning for assets that have considerably appreciated. The large increase to the estate and gift tax exemptions along with a beneficiary’s continued ability to retain a stepped-up basis incentivizes the harboring of assets within an estate, as opposed to the traditional practice of moving assets out of donor’s estate to avoid estate and gift tax. Finally, it is important for taxpayers to ensure their estate plans are flexible in order to accommodate future uncertainty.
See Caitlin E. Abram, The Tax Cuts and Jobs Act: An Overview and Four 2018 Planning Suggestions, Faegre Baker Daniels, January 23, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
