Don’t let potential tax reform stop you from estate planning
Many of our readers in Florida are probably seeing a lot of reports about the potential for federal tax reform. In Florida, with no state income tax, any change to the federal tax code is a pretty big deal. The potential for changes may even have many people taking a “wait-and-see” approach when it comes to important financial matters such as investing, buying a home or even estate planning.
But, as a recent article noted, there probably isn’t any really good reason to hold off estate planning just because there might be some changes to the federal tax code. After all, even though some of the changes that are being proposed may impact the estate tax, the article rightly points out that most people aren’t even subject to the federal estate tax because the amount of an estate that is exempt is, by most people’s standards, incredibly high.
And, that isn’t even the best reason to put aside any thoughts about tax reform and go ahead with drafting an estate plan. The best reason? Most estate planning documents can be changed. As the recent article noted, unless you set up an irrevocable trust, it is highly likely that you can go back later and make the necessary changes, if and when federal tax reform passes Congress.
When people avoid making an estate plan for any reason, they are taking a chance. Do they want state law to dictate how their assets will be distributed? Do they want state law to determine who will raise their children if tragedy strikes? No one wants to be morbid and think about death, but estate planning is just good sense.
Source: stockinvestor.com, “Should You Put Your Estate Planning Strategy On Hold? (8-Point Checklist),” Bob Carlson, Sept. 15, 2017