As New Yorkers prepare an estate plan to divide their assets after their death and loved ones of a person who recently died set about to move forward with estate administration, the inheritance tax (also known as the estate tax) is an unavoidable concern. Fortunately, for people who are estate planning, there are strategies to mitigate its impact. After the testator has died, those who have inherited the assets should be cognizant of what the new limits are based on changes implemented by the Trump Administration. As part of that, the Internal Revenue Service has released the estate tax and gift tax limits for 2019. As 2018 winds down, everyone should be aware of these and how they are affected by it.
For 2019, the individual exemption will be $11.4 million. This is a rise from $11.18 million. A testator can give that amount to heirs and there will be no federal tax. For a married couple, it is going to be $22.8 million. The amount that can be excluded as a gift stays at $15,000. This is important for those who have significant assets – of which there are many in New York. Even people who do not think they are considered “well off” might be surprised when a loved one had assets that reached these levels once the totals are tabulated.
When the changes were made, President Trump specifically wanted to help those who have vast assets from needing to pay a chunk of it to Uncle Sam. In the past, it had been $5 million for individuals. While these are temporary changes and will expire at the end of 2025, those who are opposed to the tax itself want these changes to be permanent. Because many viewed the previous regulations as onerous, the new law is a welcome relief as they seek to pass their assets on to heirs without concern that they will lose a substantial chunk of it.
Still, with estate planning and estate administration, the changes to the laws can be confusing and should be addressed from multiple angles. Those who are estate planning can prepare based on the new laws. Heirs should know how their circumstances are affected. A law firm that handles estate planning, estate administration, probate and more can be of assistance in a case and should be called for advice and help.
