Fitzgibbons Law Offices
1115 E. Cottonwood Lane
Casa Grande, AZ 85122
New Tax Law Provides Increased Estate Planning Opportunities
The Tax Cuts and Jobs Act signed into law on December 22, 2017, includes significant changes to the federal gift, estate, and generation-skipping transfer (GST) tax laws.
Each U.S. citizen or resident is allowed a lifetime
exclusion amount that may be used to shelter from gift and estate taxes
transfers of cash or other assets during life or at death.
Effective January 1, 2018, the combined gift and estate
tax exemption and the GST tax exemption amounts double from an
inflation-adjusted $5 million to $10 million. For 2018, the exemption amounts
are expected to increase to $11.2 million per individual, or $22.4 million for a
married couple. The increases are scheduled to be in effect through December 31,
2025, after which the amounts will revert to pre-2018 levels ($5.6 million per
person, adjusted for inflation.)
Unrelated to the Tax Cuts and Jobs Act, the gift tax
annual exclusion has increased to $15,000 per donee (or $30,000 for a married
couple). That change is also effective January 1, 2018.
The new tax law also permanently expands the benefits of
Section 529 college savings plans, which allow tax-free accumulation of
education savings. Under prior law, funds in these plans could be distributed
income-tax-free for qualified higher education expenses. The new law allows
distributions to be made on the same basis to elementary or secondary schools as
well, subject to a limit of $10,000 per plan beneficiary per year.
The impact of the changes made to the estate, gift and
GST taxes will depend on the circumstances of an individual or couple. For some,
the changes will provide considerable planning opportunities to make gifts or
other transfers to take advantage of the increased amounts while they are
Although fewer individuals will have to worry about
estate tax liability, the changes under the new tax law do not spell the end of
estate planning as we know it. Non-tax issues that your estate plan should still
take into account include management and distribution of assets upon death or
incapacity, guardianship of minor children, family business succession, and
planning for a loved one with special needs.
More about Fitzgibbons Law Offices'
estate planning and probate services