How Will 2018 Tax Laws Affect Your Estate Plan?


Hi there, Bridget Mackay with the offices of Bridge Mackay in Petaluma, California. Welcome to my video blog.

Today we’re going to talk about the new tax law (2018) and how it affects your estate planning. So, one of the big changes in the tax law that affects estate planning is the estate tax exemption amount. So, just for a brief description about what that is. If you pass away and you have a certain amount of assets the IRS will want to tax them if they’re over the exemption amount. So, when the exemption amount is high, you’re less likely to be paying taxes at your death.

And in 2017 the tax exemption or in 2018 under the old law the tax exemption was going up to 5.6 million. With the new tax law that number has doubled. So, now you can pass to your heirs, each individual, can pass $11.2 million without being exposed to any tax from the IRS. If you are a married couple you can double that amount and past $22.4 million dollars onto your heirs without being worried about paying taxes at your death. So, that was a huge jump and a huge relief for a lot of us in the middle and what I consider some of the upper classes.

That was one change. The other question was, does it affect married people? So, along with the old tax law, you’re allowed as a married couple. If I died and I had $10,000 or $10 million with my spouse. I was only able to shield $5.6 million of that with my death, because that would be under the old law, the old exemption amount. And, the remainder of the $10 million would have gone to my husband. And, when he died, he would have if he was still under the $5.6 million he would not pay taxes either. But, there was a way in which if we had something less than that. Let’s say we only had $2 million then I would claim the $2 million at my death. He would have a remainder of $3 million that he could add on to his exemption when he died and essentially died with $8 million.

That’s a little confusing, but that’s the portability law. You can ask probably your CPA or your estate planning attorney if it affects you. But, in the new tax laws, that was not touched at all. So, we still have the availability to move part of our exemption amount onto our spouse at our death. So that, when they die their estate has can have more in it before it gets taxed.

Those are the two main things that will affect your estate tax or your estate planning going forward. And it’s the new year. It’s really important for you to pull out your documents. Review them, make sure they’re up to date get an appointment with your attorney and make sure everything is in order. I suggest that for your New Year’s resolution.

Recent Posts

What Our Clients Say

Contact Us