When talk turns to taxes, most people think of income taxes. Yet, for some people, estate taxes may be the largest single tax expense they’ll ever incur. As of the new 2018 tax law, the federal estate tax rate will remain at 40%, but for the average American, the new law provides a very generous federal estate tax exemption of $11.2 million per person or $22.4 million per married couple. However, those people residing in certain states need to have a good understanding of their home state’s specific estate or inheritance tax rate exemptions, which can be a great deal lower than the federal exemption figures above and therefore can negatively impact an individual’s or couple’s total “death” taxes owed to both the federal and state governments combined. In short, and without proper estate planning, you could lose a good deal more of the estate that you've spent a lifetime building for your heirs than you need to.

Estate planning is more important than just minimizing estate taxes. It is the process by which you identify (1) to whom, (2) at what time and (3) under what controlled conditions you wish to pass on your estate. And a good estate plan will allow you to accomplish those three personal goals (1) with the maximum privacy, (2) with the least possible legal expense and interference, and (3) with the minimum state and federal estate taxes.

Wills, trusts, and other estate planning documents can be exceedingly complex and confusing - as well as most of the lawyers that go along with them. At the Cruice Financial Organization , we believe that it makes a great deal of financial sense to learn about and to understand which of the many alternative estate planning strategies make the most sense for your personal financial needs and objectives – before investing the time and expense with an estate planning attorney.

Estate planning is not a one-time process. You must constantly review your current plan to ensure it fits your present situation. Even if you've planned your estate well, consider updating your estate plan after any of the events below:

  • Family Changes: Marriage, divorce, children and grandchildren can all lead to the need for estate plan modifications
  • Change in Financial Circumstances: What may have been an appropriate estate plan when your income and net worth were much lower may no longer be appropriate today.
  • Geographic Move: Different states have different estate planning ramifications. Anytime you move from one state to another, your estate plan should be reviewed.
  • Change in Tax Law: Anytime there is a change in the estate tax law, changes in your estate plan may be required. What might have been a great structure under old tax law may no longer be appropriate.
  • Special Circumstances: Sometimes a child has special needs due to physical or mental limitations. Sometimes a surviving spouse’s ability to earn a living changes to a disability. Such situations create special needs that often require special planning.