Many federal and state laws changed this year that affect estate and gift taxation. It is wise to review your estate plan before the end of the year to take advantage of the changes.
As the temperatures drop, thoughts turn to end-of-year considerations such as taxes, charitable contributions and estate planning. While many are used to the year-end wrap-up required with businesses and personal income tax matters, many fail to review their estate plans as frequently as they should.
Too many people know that major events such as a death, birth, divorce or remarriage necessitate rewriting their wills, trusts or other estate planning documents. However, inheritance and estate law changes may require revisions this year as well.
Law changes affecting estate taxation – The American Taxpayer Relief Act of 2012 (ATRA) became law early in 2013, bring changes that warrant a review of your existing estate plan.
Before the end of this year, it is wise to meet with your estate planner to take advantage of legal changes made to estate taxes and other factors affecting protection of inheritances.
(B) The Tax Relief Act also allows you to give up to $5,250,000.00 in assets to someone to which you are not married, such as a child or your trust, without incurring estate tax liability. However, this increased threshold can cause issues. For example, if your trust states that any amounts excluded from taxation be deposited into a trust meant to provide for people other than your spouse, your spouse may be left with very little at your death.
For federal tax purposes, same-sex couples are treated as married. Also, on October 21st, of this year, New Jersey legalized same-sex marriage. Those couples who were married in another state but reside in New Jersey and those who are just now getting married in the state should review their wills and trusts to reflect and take advantage of legal changes.