There is a tax reform plan on the table that could, if passed, bring changes to what is known as the death tax. If this measure passes, it will eliminate this particular tax, yet some people may think that this eliminates the need for a strong estate plan. Regardless of what happens in Congress and to federal tax laws, Florida readers know that good estate planning still makes good sense.
Lawmakers have talked about eliminating and reforming certain taxes that impact estates after the death of the estate holder, mainly because it is largely seen as a form of double taxation. Up until this point, specific estate planning tools can shield beneficiaries from certain taxes. Even if the death tax does go away, there are still many protections and benefits to be enjoyed by having a solid, thoughtful and updated estate plan in place.
Even with federal tax reform, there could still be some state taxes that will apply after a person’s death. Additionally, an estate plan means that a person gets to decide what happens to his or her assets and property after he or she passes away. Lack of a will can lead to contention, lengthy legal processes and complications for beneficiaries, with or without the death tax.
Additionally, it is always smart for Florida residents to plan for federal and state taxes, as well as planning for contingencies. Through a will, trust, power of attorney and other documents, a person can build an estate plan that reflects his or her needs and objectives. The first step of this process may be to simply reach out for help and an explanation of legal options.
Source: The Motley Fool, “3 Reasons You’ll Still Need Estate Planning Even if the Death Tax Disappears“, Dan Caplinger, Oct. 21, 2017