Single people and estate-tax planning

Single residents in Texas may have to adjust how they handle their estate-tax planning due to the changes in the tax law brought on by the Tax Cuts and Jobs Act. Under the TCJA, the unified federal gift and estate tax exemption was raised to $11.18 million for the 2018 tax year and $11.4 million for the 2019 tax year. There will also be adjustments for annual inflation from 2020 to 2025.

These changes are very beneficial for people who have larger estates. However, the significantly increased exemption amounts mean that everyone, including unmarried individuals, with an estate plan or who plan to develop an estate plan should strongly consider taking advantage.

For unmarried persons who have an estate that is valued at less $11.14 million and who die in 2019, their assets can be left to loved ones without any federal estate tax being assessed. While this is good news, it does not mean that unmarried individuals do not require estate plans. Single persons with minor children should complete a will in order to specify a guardian for their children. A will is also needed in order to allocate certain assets to specific people. If individuals have concerns about leaving their assets to a loved one who may not be responsible or mature enough to handle finances properly, a trust may be needed to oversee the distribution of those assets to the loved one.

An attorney who offers estate planning services may advise clients how the changes in the tax law will affect their current estate plans. The attorney may evaluate the assets and goals of clients and recommend certain legal devices to include in an estate plan to mitigate taxes and ensure that assets are protected for heirs. Assistance may also be provided for completing wills or powers of attorney.

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