As people become aware of the need to have an estate plan, they are putting them in place. But what about people who have had an estate plan in place for many years in Michigan? Some think that with the passage of the new tax law and the changes in inheritance taxes that they have no need to review their estate plans. Such may not be the case. Estate planning review may actually be more beneficial now than before the tax law changes.
An example of one of the changes is the change to the estate tax exemption. It has practically doubled to $11.2 million. This may cause a person to think that there is no reason to be concerned regarding plans already in place. However, if the plan states that the exempt amount should go to children with the balance going to a spouse, the children could now inherit up to $11.2 million, potentially eliminating the funds for the spouse.
Other areas of an estate plan may need attention as well. With the new exemptions, one may want to review durable powers of attorney. Durable powers of attorney grant a person power to make financial decisions for a person should he or she become incapacitated. This can include the authority to make charitable gifts to help avoid the estate tax.
A person with an estate plan in place may benefit from having a conversation with an experienced estate planner in Michigan. Such a conversation could help a person to avoid unintended consequences to his or her estate planning because of changes in the tax law. This would help to ensure that the person's intentions regarding his or her estate are successfully carried out.
Source: kiplinger.com, "Update Estate Plans in Light of New Tax Law", Eleanor Laise, April 28, 2018