Georgia residents may have heard about Donald Trump’s plan to repeal the federal estate tax, or, as he calls it, the “death tax.” However, individuals with estates valued at $5.49 million or less in 2017 won’t have to pay any taxes. Couples may combine their individual exemptions, which means that they wouldn’t have to pay federal estate taxes on $10.98 million in assets. There is also no tax when assets are passed from one spouse to another.
Therefore, according to an industry expert, most individuals and couples should spend more time planning to preserve their assets for future generations rather than worrying about estate tax issues. Estate plans enable people to make crucial arrangements, such as setting up medical and financial powers of attorney, that are completely unaffected by taxes. These important documents also make it possible for individuals to designate who will receive certain assets, retirement benefits and life insurance payouts.
Sometimes there may be certain beneficiaries named that may not have the maturity or mental capacity to handle large sums of money or maintain houses. The creation of a trust may help someone plan for these issues regardless of what the estate tax threshold may be. Parents will still need to consider who would act as a guardian for their children or make other arrangements for them when creating an estate plan.
People who want to make sure that their final wishes are carried out should create wills and trusts no matter what the federal estate tax rate may be. These documents are so important because they allow individuals to do more than just control how their assets will be dispersed after they pass away. For instance, parents can designate guardians for their children in the case of their deaths as opposed to letting the state do so. Estate plans may also allow parents to create funds to care for children with special needs.