Many Philadelphia residents have worked hard to create plans for their estates that meet their specific financial goals. That is a major accomplishment and should bring about a sense of comfort in knowing that these important matters have been taken care of. Over time, estate planning rules and regulations will shift. That makes it crucial for individuals and families to make a periodic review of their existing plans to determine whether updates are needed.
An example lies in the recent move by Congress to increase the estate tax exemption amount to $5.45 million for the year 2016. That amount doubles for married couples, who will now have an exemption amount of $10.9 million. This means that any assets that fall below those thresholds can be passed down to heirs free from estate taxes.
For those who are nearing the estate tax exemption amount, it is crucial to take steps to protect assets from excessive taxation. Doing so ensures that the wealth a family has worked so hard to amass will be made available to future generations without heavy loss to taxation. An estate planning attorney can outline the various options for preserving wealth for one's heirs.
One of the most powerful tools for removing wealth from one's taxable estate is the judicious use of trusts. There are many different types of trusts from which to choose, and there is an option to suit virtually every set of needs. By making use of an appropriate trust, families can reduce their estate tax burden and protect assets from seizure based on liens, court judgments and other legal issues.
The best place for Philadelphia families to being is by sitting down with an estate planning attorney and setting out goals and projections. Even families who already have a plan in place can benefit from having those documents reviewed. The recent increase in the estate tax exemption threshold serves as a reminder that estate planning is not, and never should be, set in stone.
Source: The National Law Review, "Recent Changes in Estate Planning Laws May Be Cause for Review of Your Estate Plan", Les Raatz and Robin L. Miskell, May 5, 2016