Big Estate and Gift Tax Changes May Affect Your Estate Plan
Winter Haven and Lakeland residents have probably heard of the major federal tax reform legislation enacted recently. The law includes not only an overhaul of the federal income tax system but also the federal gift and estate tax system as well. This change has big implications for the estate planning of many Floridians. This blog post will provide some basic information about the changes made to the federal tax code and other changes.
Perhaps the biggest change is the doubling of the basic exclusion amount for estate and gift taxation. The exclusion amount is the total lifetime amount that a person can leave to others free of federal estate and gift taxation. The tax reform law increased the exclusion amount to $10 million plus an adjustment for inflation. The Internal Revenue Service computes inflation so the amount for 2019 is even larger; it is $11.4 million.
There has also been a change in the annual exclusion amount for gifts. This is the yearly amount that a person can give to another without it affecting the giver's basic exclusion amount. For 2018, the annual exclusion amount for 2019 is $15,000. This means that a person can give another up to $15,000 without estate and gift tax implications.
Polk County residents might find that now is a great time to revisit their estate plans, even if the above changes do not affect them. An estate planning attorney can look at an estate plan and propose changes if any are warranted.
Rignanese & Associates is available to work with clients on their estate planning needs. Please reach out to us at 863.294.1114.