Some Georgia residents may feel as if they have no need to review or update their will or trust. However, a person's needs and wishes can change dramatically from the time that they first write a will or create a trust. For instance, an individual could welcome a child or grandchild into the family, and that new family member may need to be included in estate plan documents.
Gross estate refers to the value of all the assets in an estate. It may include real property both in and outside the country, bank accounts, annuities, stocks and more. Even property that is not necessarily owned by the estate is included, such as property a person possesses a general power over, gifts and some life insurance proceeds. For a person in Georgia, if the total of all this is under the federal estate tax exemption, it is not necessary to pay estate taxes.
Georgia residents might like to know about legitimate ways to minimize or eliminate gift and estate taxes. Those who own a successful business may wish to freeze the value of a company to avoid taxes due to future appreciation of the company.
Estate planning professionals in Georgia and around the country will likely welcome news that the Internal Revenue Service has made it easier for a surviving spouse to receive the unused portion of the deceased partner's estate tax exemption. Under Revenue Procedure 2017-34, the executors of individuals who died in 2011 or later will have until January 2018 or later to make what are known as portability elections. The executors of estates of individuals who died on or after Jan. 2, 2016 have two years to make portability elections under Revenue Procedure 2017-34. The new rules went into effect immediately.
When Georgia residents consider writing a will, they are often concerned with ensuring that their loved ones are provided for, that minor children will be taken care of, and that their end-of-life medical decisions will be respected. One area that is sometimes neglected is that of charitable giving.
Careful estate planning can be used to reduce the tax burden on assets that are intended for the next generation. Georgia residents may want to know if estate planning is necessary if the federal estate tax will be repealed as promised by the current presidential administration.
Artists and celebrities in Georgia might want to consider the value of their images or likenesses when making an estate plan. The image of someone who earned a living as an entertainer or was famous might continue to be profitable after death, and estate taxes could apply to that after-death value.
The death of Prince at just 57 years of age in April 2016 left music fans in Georgia and across the country saddened. The iconic performer reinvented himself on a number of occasions during a glittering career that spanned more than four decades, but his failure to put even the most basic of estate plans into effect has benefited the federal government at the expense of his heirs. Experts say that estate taxes will claim more than half of Prince's estate, which has been valued at about $200 million, but they also point out that this could have been prevented fairly easily with some prudent estate planning.
When an estate is worth more than the federal exemption, estate tax rates could be as high as 40 percent. Georgia residents may need to know about the importance of taking into account these contingencies when they are planning their estates.
Georgia residents may have heard about Donald Trump's plan to repeal the federal estate tax. While he may end up cutting some taxes, it is important not to base an estate plan on the president-elect's campaign statements. Individuals who are planning their estates should not assume that federal estate taxes are going away just yet.