Have You Taken Advantage of the Tax Cuts and Jobs Act Planning Window?
|Important Estate Planning Tips You Should Act on Now
Like all things, tax laws constantly change. Together, we need to respond quickly and strategically to the new developments in the tax law landscape. While you should not wait to review your estate plan in light of the passing of the Tax Cuts and Jobs Act (TCJA), neither should you make a knee-jerk reaction.
The best decisions are made when you carefully analyze all angles of your estate plan to come up with the best strategy for you and your family. The law’s benefits will accrue most for those who take a proactive approach rather than those who wait until the last minute. Here are several reasons the tax changes need to be top of mind:
New tax developments are especially pertinent if you are a business owner. With a possible 20% income tax deduction for pass-through entities, you should review entity selection for your business operations as soon as possible. Now is also the time to consider gifting of interests to reduce the limitations inherent in the qualifying business income calculation and to utilize the increased gift tax exemption.
If you have a “specified service business” as an attorney, doctor, dentist, consultant, or similar profession, it may make sense to separate any “non-service” businesses out of your service business — such as real estate or clerical activity. Utilizing multiple trusts may help you achieve a larger QBI (qualifying business income) deduction.
Do Not Just Think About Taxes!
The implications of the TCJA go much further than taxes. You need an estate plan that takes a thoughtful approach to asset protection, privacy, retaining control, avoiding issues like guardianship and probate, and ensuring that your loved ones are cared for in years to come. These aspects of estate and financial planning are constant regardless of fluctuations of tax reform.
Collaboration with the attorneys of MendenFreiman LLP is critical for long-term success. We are ready to help you plan for whatever comes next. Contact us to learn how we can help you fully protect you and your family.