What You Need to Know About Estate Planning
Although no one likes the idea of estate planning, it is a necessity of life. Whether you have a modest home or a few houses and vehicles, it is important for you to carefully plan who these estates will be left to in the event of your death. Each year, the laws involving how estates, gifts, and other related provisions change. If you are thinking about working on your estate planning, you should be aware of what has changed and what has remained the same this year.
What Remains the Same for 2017
There are some things that have not changed this year. Although the government’s gift tax provisions apply to even the smallest gift, the tax laws provide an annual exclusion that allows gifts up to a certain amount to not pay tax or file a gift tax return. For the past couple of years, this amount has stayed the same of up to $14,000. But there are a few exceptions to this rule. Most people can make unlimited gifts to their spouses. People can also leave money for medical care or education if these gifts are made payable to the institution. These federal taxes for gifts have also remained the same within nominal brackets that run from 24 to 40 percent. However, because of the way that unified gift and estate tax credits are structured, there is just one rate in practice: 40 percent.
The Changes for 2017
Although some things remained the same, there are some things that have changed over the year. If you decide to make gifts larger than the annual exclusion amount, you still won’t have to pay taxes on them right away. This is due to the U.S. tax laws that unify the gift and estate taxes by providing a single tax credit that allows people to make taxable gifts during their lifetime and to transfer estate property to heirs tax-free up to a certain amount. To account for inflation, this amount is $5.49 million in 2017. Although federal estate tax laws have changed dramatically, not all states have followed suit. More than a dozen states impose estate or inheritance taxes of their own, even if the provisions do not necessarily jive with federal laws. Although there has been a trend of less severe estate taxes at the state level, these taxes have not disappeared entirely.
When thinking about planning your estate, it is important for you to take these changes into account. For more information on estate planning in 2017, call WeberMessick today!
Planning Your Estate’s Future with WeberMessick
Want more information on planning your financial future? Contact WeberMessick today! Since 1984, WeberMessick’s team of CPA’s and financial advisors have been helping individuals and businesses throughout the Maryland and Delaware devise a plan for their finances. With a “client-first” philosophy, WeberMessick has been helping their clients achieve financial success. Whether it is through financial planning or our accounting services, WeberMessick is always here for you!