People in Georgia and across the United States may be wondering how to best take advantage of the recent changes to federal tax law, especially in terms of estate planning. As of the start of this year, higher exemptions for estate, gift and generation-skipping transfer taxes went into effect. The exemptions, which were doubled with the passage of the bill, are now set at $11,180,000 for a single person and $22,360,000 for a married couple. These amounts are scheduled to be adjusted upward every year to reflect inflation rates.
These exemptions will stay in place for eight years until they return to inflation-adjusted rates that reflect the 2017 exemptions. While those are still quite generous, they are not as significant as the increased exemptions. In order to maximize the potential to benefit from the increased exemptions, an estate plan must be put in place before the sunset date in 2026.
One important part of an updated estate planning strategy should be to make use of gifting. In particular, the use of trusts to make gifts from the estate can set in place a clear plan for the use of the assets in the future. By making use of the exemption for generation-skipping transfer taxes, a gift made via a trust can be protected against future taxation.
There are an array of estate planning options that can be used that make use of the Tax Cut and Jobs Act, including using grantor trusts to sell assets, arranging trust taxation to benefit the estate and planning for income tax changes. An estate planning lawyer can work to update wills, trusts and other documents to fully make use of these exemption levels.