In Kentucky and across the United States, people who are vigilant and preparing for the future will take the necessary steps in creating a viable and comprehensive estate plan that suits their individual needs. Of course, situations vary and what suits one person is unlikely to suit another. For people of substantial means, it is important to be aware of how potential changes that come with every new presidential administration might impact them. Periodically assessing the estate plan and deciding whether it needs an update is a crucial part of an effective document.
Future changes to the tax laws make assessing an estate plan imperative
The Tax Cuts and Jobs Act passed under President Donald J. Trump benefited wealthier people with a higher estate tax exemption. Now, under President Joseph R. Biden, the exemption could be significantly reduced. Some experts believe it could go from its current level of $11.7 million for an individual to possibly as low as $3 million, though the plans and details are still unknown.
This is a drastic reduction and one in which wealthier people might want to think about addressing by considering a trust. An appealing alternative might be a bypass trust. This is also referred to as spousal limited access trusts (SLATs). SLAT is an irrevocable trust that will be in place for the good of the other spouse. Another potential strategy to simply gift part of the estate to heirs is with the grantor retained annuity trust (GRAT).
No matter a person’s financial situation, estate planning is wise
These types of trusts and strategies are useful for wealthier people who want to protect and shield as much as possible for their heirs. Not everyone is of substantial means and other options are wiser for them. With estate planning, flexibility is beneficial. This is true whether it is creating a simple will, having a trust for greater control, preparing a power of attorney for a trusted person to make decisions, passing along property or updating the documents, there are points to remember. The estate plan generally needs to be assessed to see if it still effective or needs to be updated. For any part of estate planning, having experienced advice is critical.