With the lifetime exclusion amount for the federal estate and gift tax at roughly $11 million for individuals ($22 million for a married couple), most people are not going to be subject to a federal estate tax. Still, estate planning remains an important part of financial planning. In addition, investors need to be mindful that many states have their own estate and inheritance taxes, and the exemption levels are much lower.
Chris Hennessey identifies areas where the focus of estate planning has shifted since tax reform:
- Income tax planning with stepped-up cost basis at death
- Establishing and maintaining important documents such as wills and health-care directives
- Asset protection strategies to protect wealth from potential creditors
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