presented by Bradford & Holliman, Estate Planning
At the time I am writing this article, no one knows exactly what will happen with tax reform. However, it appears that the estate tax exemption will be significantly increased.
Presently, estate taxes are not a worry for the average Alabamian as the exemption limit was increased to $5 million per person under President Obama in 2012. Today, the estate tax exemption is $5.49 million dollars per person. In other words, a person must have over $5.49 million before his or her estate will pay estate taxes. Of course, if estate taxes are an issue, the tax rate is a hefty 40 percent.
If, under President Trump, the estate tax exemption is further increased, it will work to solidify the fact that most Alabamians do not have to actively plan to avoid estate taxes. However, that does not mean that estate planning is not necessary. Tax reform is expected to change other areas such as business taxation and deductions such as medical deductions. These are areas of important interest to business owners and seniors paying for long term care. Planning to pay for long term care and asset protection will continue to be a problem as the baby boomers age and the reality of paying for long term care sets in. Families need to be aware of options and proactively plan the best ways to provide care for seniors.
As tax reform occurs, make sure you check with your estate planning attorney to determine if you need to make changes due to changes in the tax laws and take the time to review your estate plan for any other changes that need to be made. And remember, blended families and families with troubled relationship dynamics will continue to need estate planning to make sure assets are passed in the way that is desired and in the best manner.
–Melanie Bradford Holliman
Partner, Bradford & Holliman, LLC
Practice focuses on estate planning, elder law and special needs trust.
2491 Pelham Parkway, Pelham, Ala. 35124
This article is for educational purposes and is not intended for specific legal advice.