Taxes That Might Affect Your Estate Planning

Taxes are constant, tax laws — not so much. So let’s look at a few examples. The secure act — which passed at the start of 2020… Was meant to strengthen retirement security for all Americans. 401k’s and IRA’s help retirees rely less on the shrinking resources of government programs and provide tax-deferred growth, that means more security. Among other things, the secure act allows small business owners to join multiple- employer plans.  That way, small businesses can band together to offer retirement accounts to their employees. The secure act also eliminated the maximum age cap for contributions to those traditional IRAs. Now let’s look at the estate taxes:

There were changes to the estate tax exemption back in 2019, under the TCJA… Or Tax Cuts and Jobs Act. The TCJA doubled the federal estate tax exemption to 11 million dollars for singles… And 22 million for married couples, but depending on the outcome of the November election, that exemption could be reduced dramatically. Whatever the fate of the estate tax, you may be able to *legally protect your assets from those taxes, through trusts and charitable donations. But remember- there is a fine line between lawful tax reduction and fraud… So be sure you have an experienced attorney working with you. Gift taxes and generation skipping taxes are other methods the government put in place to stymie those who want to avoid paying estate taxes, but there are options. There are a number of legitimate perfectly legal ways to protect your hard-earned assets.  Assets you want going to your loved ones and favorite relatives, which probably does not include Uncle Sam. If you have questions about this, or any estate planning issue, call Doane and Doane… Or visit doaneanddoane.com.