The old year is ending and a new one is about to begin in New Jersey. With the beginning of 2019 comes the implementation of new tax laws that determine how large an estate can be before it is subject to the federal estate tax. The estate and gift tax exemption for 2019 is $11.4 million. To better understand how much this amount has changed, consider that the exemption was $5.49 million as recently as 2017. This change can have an impact on one’s estate planning.
If an estate or gift exceeds that amount, it will be taxed at a flat rate of 40 percent. The majority of people have estates that are smaller than the exempted amount, and some may think that the increase in the exemption negates a need for an estate plan.Young professionals may wish to carefully consider the implications of not having an estate plan. In the event of a premature death or serious injury, what would one’s final wishes be?
A will is needed if a person wants to ensure that certain assets or items go to specific people. Also, a young family may want to ensure that minor children are cared for both physically and fiscally. One may wish to designate guardians for physical care and a trust can be created for fiscal care. A trust allows a trustee to manage a child’s inheritance for a period of time designated in the trust, typically until a child reaches an age where he or she can be considered responsible to manage it for oneself.
Estate planning can be complex and should be carefully considered and thought out. No one wants to think about one’s own death, but it is something that all people will eventually face and no one knows when it will happen. Planning for that uncertain future is a beautiful gift to give to loved ones in New Jersey.