Much of the federal political focus this week is on the President’s tax plan. Will the estate tax be eliminated (probably)? Will the limits be higher (possibly)? Lower (almost definitely not)?
The pending gubernatorial election in NJ has estate taxes as a major issue as well. Currently the NJ estate tax is scheduled to go away on as of Jan 1, 2018. It’s possible, though, that the next Governor pushes to have some estate tax brought back to the Garden State.
As it currently stands, Federal Estate Tax limits are at approximately $11mm for a married couple. That number affects approximately .2% of the population, or 2 out of every 1000 people. If you’re not one of those hard working and / or lucky people, the estate tax doesn’t, and likely won’t, affect you.
So, you PROBABLY don’t need to worry about estate taxes. But you should still have an estate plan! You should still have a plan because you:
- Want to control what happens in the event of your disability or incapacity, and who will make decisions on your behalf and manage your affairs if you can’t.
- Want to decide who will be responsible for raising your minor children if something happens to you, and at what age those children will be able to access your assets
- Want privacy when you pass away and don’t want your assets publicly disclosed.
- Have a business and have specific thoughts on the succession plans for that business.
- Have special needs children and want to ensure that they maintain access to government benefits in the event of your passing.
- Have specific philanthropic goals.
- Have assets in several states and want to limit fees and hassles for your heirs.
- And many other reasons that have little to do with money or taxes.
So, if you’re one of the .2%, and prefer not to give a significant portion of your money to the government when you pass, please make sure you have an estate plan. If you’re one of the other 99.8%, please make sure you have an estate plan too….just for different reasons.