The Tax Cuts and Jobs Act (TCJA) will likely change the way that North Carolina residents approach estate planning. The current generation-skipping trust (GST) and estate tax exemption is $11.18 million as of the first day of 2018. That amount doubles for married couples who choose to invoke portability, and it may increase based on inflation. However, as it currently stands, the increased exemption will sunset in 2026.
How to estate plan after the tax law change
Planning for health care during retirement
When making plans for their retirement, North Carolina residents should remember to also include their health care. This is one aspect of retirement that some people fail to plan for, which can result in a major hit on their savings if an unexpected medical crisis occurs.
Estate planning considerations
Many people in North Carolina put off estate planning, and some people pass away before they ever complete their plans. It is important for people to draft their estate plans sooner rather than later so that their families will be left with fewer burdens.
Changes in the tax law and its effect on legacy planning
In 2017, Congress passed legislation that made significant changes to tax law. For people in North Carolina who are creating an estate plan, the major part of that law that may be of interest is the increase in the estate and gift tax exemption to $11.2 million for individuals and $22.4 million for couples. However, this is set to expire at the end of 2025. Furthermore, while planning to save on taxes is a part of legacy planning, it should not be the first priority.
