Have you reviewed your estate plans recently? If not, you may want to do so now. The reason is that there have been some big changes in the amount of money you can leave to your heirs free of estate taxes.
For the 2014 tax year, the estate tax exclusion amount is $5.34 million. It increases to $5.43 million for 2015.
That’s good news, right? Maybe not.
There may be a problem if your estate plan was drafted in 2001 when the exemption was $675,000. Since then, the exemption has fluctuated wildly from 2001 though 2011. During this time, many people had wills and trusts drafted that would double the exemption by creating “family” trusts.
It’s possible that the formula for determining how much of the couple’s assets will go to the “family” trust will now cause all of the assets go into the trust rather than to the surviving spouse. This may not be the result that most people want.
For added information about estate planning, get a copy of our book “Before I Go” and the accompanying workbook.