Estate Tax Changes for 2014

Typically, new amendments or laws regarding estate planning will start at the beginning of the year, and 2014 will be no different with regard to some changes in estate planning. One of the biggest changes hitting the landscape is that as of January 1st, individuals are able to pass on an additional $90,000 free of the federal estate tax to others during their life and at death. Since this is such a dramatic change, it’s worth a call to your estate planning attorney to talk about how this might alter your existing plans for the upcoming year.

estate tax changes IMAGEWhat’s behind the change? It’s a lot more practical to give individuals the opportunity to give gifts during their life or at death at this new higher limit without having to worry about the estate tax. Previously, the exclusion amount was capped at $5,250,000, but now each personal obtains a “Credit” to offset estate taxes on amounts up to $5.34 million.

Also new for the upcoming year is an increase for the generation-skipping transfer tax exemption (up to the same $5.34 million as mentioned above) and the increase to the annual exclusion for gifts to non-citizen spouses (from $143,000 to $145,000). A minor increase to the foreign earned income exclusion is also being put into place, from $97,600 to $99,200. The gift tax, however, will stay the same, allowing each person to gift up to $14,000 without any tax ramifications.

Reading through these changes should get you thinking about whether you’re affected by any of the updates to the law. Estate planning can be a confusing process, but it’s much easier when you have the guidance of a trained professional. It’s a great time of year to set up an appointment to bring in your existing documents for review and to consider whether any updates are required. If you’re ready to get organized for 2014, contact a Wheaton estate planning lawyer today.

 

Conducting a Year End Estate Planning Review

With the New Year on the horizon, now is a great time to review all of your estate planning documents and get them updated. Don’t let this important review pass you by-if your circumstances have changed at all you need to revise your documents. To ensure that your materials are up to date, set a yearly calendar reminder to look them over before the new year starts. If you need changes to your documents, reach out to an estate planning attorney today to get your appointment scheduled. Skipped making your will and other documents last year? Now is a great time to get your house in order.

Another reason that the end of the year is a great time to conduct an annual review on your documents is that when there are changes in federal or state law, they tend to take effect starting in January. This upcoming year is no different, as there are several changes in estate planning law that are coming in 2014. Starting in January, 2014, the amount of tax free transfers to family in a lifetime is increasing by $90,000. Doing your annual review now allows you to speak with your estate planning attorney about changes that might affect your documents or your estate.

This time of year is a good opportunity to remind relevant individuals, like your trustee or beneficiaries, where your documents have been stored. Knowing where items are makes it easier to find them but it also limits the chances of family arguments about the “right” version of your will or trusts.

Have any major life changes happened in the past year? Gotten married or divorced? Given birth, adopted, or met a new grandchild? All of these occasions might shift your estate planning needs, so you should definitely take another look at your documents this year. Make a list of all the changes that you need to your current documents and reach out to the offices of your Illinois estate planning lawyer today.