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Preparing estate planning documents based on political realities

A common concern for New Jersey residents who have significant assets in their portfolio as they craft their estate plan is wealth protection. Part of that is keeping track of how the government is dealing with various issues that will affect them. This includes the health care plan that has been presented by Republicans and if there will be tax cuts. Those who are wealthy are currently holding off on estate planning because of these current issues.

Taxes and the plan presented by President Donald J. Trump has a repeal of the inheritance tax - also referred to as the estate tax. Currently, those with assets beyond $5.49 million must pay 40 percent tax when inheriting it. It is twice that for a married couple. Those who are concerned about the tax burden for heirs can consider a trust. While there are alternatives, the repeal of the tax can make the trust unnecessary. But it is still not known as to what is going to happen with these plans.

Some wealthy people might think about transferring assets as a gift. That will reduce the taxable estate after death. But the limits also apply to gifts, so that might not be an option for those whose wealth is likely to be taxed after death when it is passed on to heirs. For people who are considering how to proceed, there are certain basics they should adhere to: the documents should be in place with a will, a living trust, a health care proxy, and a power of attorney; worrying about the estate tax is a mistake when deciding on a trust - there are other reasons to have a trust that go beyond taxes; examining the estate plan if one has been crafted and checking if anything needs to be changed is vital to anyone whether they have significant assets or not.

With estate planning and wealth protection, one of the most important factors is having legal advice that is experienced with these matters and can adjust based on the political realities. Calling a legal professional who has assisted an array of clients with estate administration is key to having a comprehensive plan and covering all the bases.

Source:, "Thanks, Congress. Wealthy investors hold off on estate tax planning," Darla Mercado, July 11, 2017

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