For those who don’t manage to review their estate plans as often as they should, it’s time to break a bad habit: Revisions may be in order for many in New Jersey and beyond due to new tax laws.
Changes to both inheritance and estate tax will affect estate taxation. Here are a few items that should be examined now as they relate to your wealth transfer plan:
- Earlier this year, the American Taxpayer Relief Act of 2012 (ATRA) became law. ATRA allows you to leave an unlimited amount of assets to your spouse. Children and other beneficiaries will be excluded if your will or trust says that your spouse will be provided up to the “maximum amount permitted by law.” Also, under the ATRA, you may give up to $5,250,000 in assets to a non-spouse, such as a child or your trust, without racking up estate tax liability.
- The taxes of many couples in New Jersey and across the nation will be affected by the striking down of a key provision in the Defense of Marriage Act (DOMA). Same-sex couples are treated as married for all federal tax purposes, regardless of where they were legally married. Additionally, New Jersey recently gave same-sex marriage the green light. Couples who were married in another state but live in The Garden State, as well as those who are just now saying their vows, should alter their wills and trusts to capitalize on these legal changes.
- The estate-tax exemption for 2014 will be $5.34 million for individuals, up from $5.25 million in 2013.
Give McManus & Associates a call at 908-898-0100. We can help you modify your estate plan to take full advantage of the new rules.