“How the 2017 Tax Reform Act Affects Estate Planning for High-Net Worth Individuals”
On Dec. 20, 2017, Congress passed far-reaching changes to the Internal Revenue Code that were signed into law by the president on Dec. 22, 2017 as Public Law 115-97 (the “2017 Tax Reform Act,” also informally known as the “Tax Cuts and Jobs Act”). The new tax law provides significant estate planning opportunities for high net worth individuals to take advantage of a temporary doubling from $5,000,000 to $10,000,000 (subject to indexing) of the estate, gift, and generation-skipping transfer (“GST”) tax exemptions. This temporary doubling of the federal estate, gift, and GST tax exemptions (as indexed) from $5,490,000 in 2017 to approximately $11,180,000 per person (and to approximately $22,360,000 for a married couple) as of Jan. 1, 2018 creates both (1) a window of opportunity for gifting due to the significant expansion of federal gift and GST tax exemptions and (2) a need to review existing wills and other estate planning documents to ensure that they continue to carry out planning objectives. (The actual amounts of the new exemptions are subject to confirmation by the IRS.)
This article originally appeared in the February 2018 TaxStringer and is reprinted with permission from the New York State Society of Certified Public Accountants.