New Estate Planning Laws Offer Advantages For Those In Florida
Strategy is an important aspect of planning an estate. One of the most important aspects of estate planning strategy is planning for tax liabilities in Florida or in any other state. Lawmakers recently passed the American Tax Relief Act of 2012 (ATRA) which has resulted in significant changes in strategies for tax planning for estates. Luckily, many of the changes are beneficial for those planning their estates as long as they alter their strategies to take advantage of these beneficial provisions.
The ATRA set the limit for the estate, GST and gift tax rate at $5 million which is indexed for 2011 inflation figures. This amounts to tax exemptions for amounts below $5,250,000, meaning the estates are only taxable beginning at this amount of assets. Therefore, gifts made from a person’s estate are exempt up to $5.25 million. Also, the tax rate is permanently set at 40 percent.
Another advantage of the ATRA is the extension of the 2010 portability provision which enables spouses to transfer unused estate tax exclusions to a surviving spouse after the death of one spouse. Many people have not considered this in their estate plans because it was unclear whether this provision would be continued after its two year sunset provision. However, the ATRA has made this provision permanent, which could affect many people’s strategies for estate planning.
Those in Florida or any other state looking to capitalize on any potential advantages the new estate planning laws have offered will need to research the new laws in order to apply it to one’s specific circumstances. Also, if there are changes which need to be made to estate planning documents one must make sure that the drafting of the new documents is done correctly. Even minor mistakes can cause an estate planning document, such as a will, to become not legally enforceable.