Estate Tax Clawback

Estate Tax Clawback image

The new tax law has left an important estate tax issue up to the IRS to determine. That is what to do if the estate tax exemption reverts to its previous level and the deceased has gifted more than that amount.

The recently passed tax reform bill required Congress to make several compromises because of budget limitations in the amount the bill could add to the deficit and avoid a possible filibuster by Democratic senators.

Those limitations prevented a complete elimination of the estate tax, as had long been proposed by Republicans in government.

The estate tax exemption has now...

Charitable Remainder Trusts Can Be Dangerous

Charitable Remainder Trusts Can Be Dangerous image

Charitable remainder trusts can be a great vehicle for elderly people to downsize without paying a steep tax penalty. They can also be very dangerous, if not handled correctly.

One problem many older Americans have, is that they would like to retire, move or just downsize. However, the tax consequences of doing so can be difficult to get around.

An elderly couple that has lived in the same home for decades would have to pay capital gains taxes, if they sell the home. This could make it more difficult to sell the home and have the money to move somewhere...

Some States Charge a Bundle If You Die There

Some States Charge a Bundle If You Die There image

Federal estate tax gets the attention, but some states need focus as far as estate planning is concerned.

There are some states that still levy an estate tax and can be expensive places to pass away, according to Forbes in “Where Not To Die in 2018.”

Some states tie their exemption level to the federal government’s, such as Hawaii and Maine. Those states get an automatic tax break.

Some other states have already passed legislation to do the same thing and other states have recently repealed their estate taxes.

Oregon and Massachusetts are tied for the lowest estate...

The New Estate Tax

The New Estate Tax image

Congressional Republicans reached a final deal on a tax reform bill. They kept the estate tax in place, with an important modification.

One of the bigger issues with the Republican plans to reform federal taxes had to do with the estate tax. Most Republicans would like to see it done away with entirely.

The initial bill passed in the House of Representatives did just that, by phasing the estate tax out over a period of time. However, the Senate version of the bill was more cautious and just changed the exemption limit, while keeping the estate tax in place.


The Deceased Spousal Unused Exclusion

The Deceased Spousal Unused Exclusion image

Many people who do not have to pay the federal estate tax are unaware that there is still a benefit to the spousal election that might benefit them in the future.

When talking about the estate tax exemption limit, estate planning attorneys often discuss two different numbers. They mention the individual exemption amount and the married couple exemption amount, which is double the individual number.

The reason they do this, is because of the spousal election.

When one spouse passes away, the surviving spouse can take what is called a spousal election which will give them the married couple’s exemption...