November 02, 2013 /24-7PressRelease/
-- New tax laws may require many in New Jersey to make estate plan changes
As the temperatures drop and people across the nation gear up for winter, thoughts turn to end-of-year considerations such as taxes, charitable contributions and estate planning. While most 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.
Many people know that major triggering events -- such as a death, birth, divorce or remarriage -- necessitate rewriting their wills, trusts or other estate planning documents. However, inheritance and estate tax
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, bringing changes that warrant a review of your existing estate plan. Additionally, the defeat of a key provision of the Defense of Marriage Act (DOMA) affects taxes for many couples in New Jersey and across the nation.
Before the end of this year, you may wish to meet with an estate planning professional
to take advantage of legal changes made to estate taxes and other factors affecting protection of inheritances. Some of these changes include the following:
-Leaving assets to a spouse:
Under the ATRA, you may leave an unlimited amount of assets to your spouse. If your will
or trust states generally that your spouse will be provided up to the "maximum amount permitted by law," he or she may get everything to the exclusion of children or other beneficiaries for which you intended to provide.
-Leaving assets to a non-spouse:
The ATRA also allows you to give up to $5,250,000 in assets to someone to which you are not married, such as a child or your trust, without incurring estate tax liability. While this is a boon for many seeking to provide for their loved ones, the increased threshold can cause issues for some. For example, if your trust states that any amounts excluded from estate taxation be put into a trust meant to provide for people other than your spouse, your spouse may be left with very little at your death.
For all federal tax purposes, same-sex couples are treated as married, no matter where they were legally married. Also, just this month, New Jersey passed a law allowing 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 -- must modify their wills and trusts to reflect and take advantage of legal changes.
Seek legal advice
This list is not exhaustive and there are many ways that the ATRA and other law changes may affect your estate plan and taxation of your estate. If you have not had your estate plan professionally reviewed in the past year -- or you do not currently have an estate plan -- consult an experienced estate planning lawyer. An attorney knowledgeable about recent tax law changes can help you modify your end-of-life documents in order to take advantage of the new rules.
Article provided by Whitlock Canter LLC
Visit us at www.davidkwhitlock.com