Estate planning is an important step for everyone to take at all stages of life, but for the elderly it can be especially important. With new laws constantly being enacted, it’s important for seniors to stay informed about the changing estate planning landscape.
For starters, the federal gift tax exclusion from 2022 has increased to $17,000. This means that you can give up to $17,000 to anyone without having to pay taxes on the gift. However, gifts greater than this amount must be reported to the Internal Revenue Service (IRS) and will be subject to taxation. This amount is adjusted annually, so it’s important to stay up to date with the current maximum exclusion amount.
Another change to consider is the updated rules surrounding different types of trusts. The two most popular types of trusts are Revocable Living Trusts and Irrevocable Trusts. Revocable Living Trusts allow the grantor to make changes to the trust while still alive, while Irrevocable Trusts are not able to be modified once they have been created. It is important to understand the differences between the two types of trusts and to choose the one that best suits your needs.
The exemption for estate taxes has also been updated for 2023. The federal estate tax exemption has increased to $12.92 million for individuals, while the amount for married couples is up to $25.84 million. This means that if your estate is worth less than this amount, it will not be subject to estate tax. If your estate is worth more than this amount, steps should be taken to reduce its value through methods such as gifting and charitable giving. In addition, a deceased spouse’s unused exemption (commonly referred to as “DSUE”) is portable to and may be used by the surviving spouse.
With the changing landscape of estate planning, it is more important than ever for seniors to review their estate plans and make any necessary updates to ensure that their overall financial goals are met. It is a good idea to seek advice from an experienced financial professional to help navigate these changes and ensure that your current and future needs are met.
Estate planning can be a daunting task, but it is an important step for everyone to take. Seniors, in particular, need to stay informed of the changing laws and regulations surrounding estate planning to ensure that their final wishes are respected.
The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.