California readers know the new GOP-sponsored tax bill changes many things for many Americans. From spousal support to estate plans, you would be wise to carefully review how this bill could impact you and how you can protect yourself from any negative impact. For you, this may mean taking your current estate plan into careful consideration.
It is prudent to reevaluate your estate plan from time to time, especially after major life changes. From remarriage to deaths in the family to divorce, major changes in your life require major adjustments in your existing estate plan. Failure to take the new tax plan or other factors into consideration could result in issues and complications for your loved ones in the future.
New tax plan, new considerations for your estate plan
Every estate plan is different, but if you have assets that amount to a few million dollars or more and you intend to leave them to your spouse, children or other beneficiaries, you would be wise to consider the impact of the new tax law on your plan. Consider the following:
- The wording of your estate plan could leave your spouse with a smaller portion of your estate than you originally intended.
- Due to the changes in tax law, if you did not specify a dollar amount of money to go into a trust for your children, the majority of your estate could go to your kids instead of your spouse.
- The federal exemptions for estate taxes double under the new tax law, which means that generic wording in your will could mean more money will automatically go to your kids.
This is a significant shift in the way that tax exemptions will affect large estates and wills drafted at any point before 2018. An evaluation of your current estate plan can determine if you could benefit from an update.
Estate planning for everyone
You may not have millions of dollars to leave your loved ones in the future, but you still will find great benefit in having a strong and updated estate plan in place. Regardless of whether or not you think the new tax plan will affect you, you can still benefit from seeking an evaluation of your estate plan.
It is smart to regularly adjust your plans and update your will. Life does not stay the same, and your will should not either. You worked hard to build your estate, and you can exercise your right to decide what happens to it.