The vast majority of adults in the United States do not have any estate planning documents in place. This is even true for a high percentage of older folks, and in many cases, loved ones are left behind to deal with some unfortunate consequences.
Because there’s so much procrastination, people that finally take action tend to breathe a sigh of relief. They put the documents in a safe place and they feel as though the matter has been taken care of once and for all. This is another misguided notion.
Estate planning should be viewed as an ongoing process, because circumstances in your life will invariably evolve.
Clearly, many important factors will change over the years. There can be additions to the family, and when your children are adults, the structure of the original estate plan would no longer be appropriate. Changes in marital status would also trigger the need for an estate plan update.
Possible Estate Tax Exposure
If you are increasingly successful from a financial standpoint, you may have to consider possible estate tax exposure. A very significant improvement in financial status can be your own doing, and in other cases, people receive large inheritances that add to their wealth.
An estate plan that was devised when you were not exposed would be sorely inadequate if the value of your estate ultimately exceeds the amount of the federal estate tax exclusion. At the time of this writing, it is $11.58 million. Clearly, this is a considerable sum, but there are those that are exposed.
Plus, this estate tax exclusion was put into place after a tax overhaul went into effect in 2018. Prior to that, the estate tax exclusion was in the $5 million range. When political winds shift, the estate tax exclusion may well be impacted, so your level of exposure or lack thereof could take a dramatic turn.
In addition to the exclusion, there is also a proposal on the table right now that would eliminate the step up in basis for appreciated assets that are inherited. As it stands today, if you inherit assets that went up in value during the life of the decedent, you would not be responsible for an increase from a capital gains perspective.
There is no state-level estate tax in Ohio, but there are some states that you have their own estate taxes. Let’s say that you inherit valuable property that is located in one of these states. After your passing, the estate tax in that state would be applicable, and this is another consideration.
Attend a Free Webinar
We have always been committed to education, because we want people in our community to recognize the importance of estate planning and nursing home asset protection. To this end, we conduct seminars on an ongoing basis to share vital information with our neighbors.
Now that the novel coronavirus has impacted life for all of us, adjustments have been made. Our information sessions are now delivered in webinar form, so you can get the same experience without leaving your home. To see the schedule and obtain reservation information, visit our webinar schedule page.
Schedule a Remote Consultation!
If your estate plan is in need of an update, put the procrastination behind you today and make the right move. And of course, if you have never put a plan in place, action is definitely required.
There is no need to take pause because of novel coronavirus concerns, because we are offering consultations through telephone and video conferencing. You can send us a message to request an appointment, and we can be reached by phone at 513-721-1513.