Due to recent changes in the federal tax code, Connecticut residents and others may need to schedule an estate plan review. This may be true regardless of how recently the plan was created. One of the most significant consequences of recent tax reform was the increase in the federal estate tax exemption. Couples may now have an exemption of up to $22 million compared to just $600,000 in 1997.
For many, it may no longer be necessary to make use of trusts as a tool to reduce estate taxes. However, individuals should also understand that there may still be good reasons to use trusts aside from potential tax benefits. Parents may make use of a special needs trust or make use of trusts to ensure that property is passed down to them instead of a spouse or other family members.
Giving to charity through a trust may help to reduce income or other taxes that heirs may face when receiving property. Putting assets in a trust can keep them outside of an estate, which may mean that there is no need to go through the probate process. Individuals are still encouraged to focus on other aspects of an estate plan such as ensuring that beneficiary designations are updated. They should also make sure that they have power of attorney forms properly completed.
Wills, trusts and other estate planning documents may help a person retain control of assets while alive and after death. Trusts may be as broad or as focused as necessary to meet a person’s needs. An attorney may be able to help an individual create or edit a trust to best align with his or her goals. An attorney may also create or review other estate plan documents as needed.
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