Tax reform and the importance of long-term care planning
The recently enacted Tax Cuts and Jobs Act of 2017 provides for a dramatic increase in the federal estate and gift tax credit - the amount excluded from federal taxation. The act, which became effective on
For 2018, the estate and gift tax credit will be
Because of this increase in the amount excluded from taxation, the vast majority of Americans will not be impacted by federal estate and gift taxes. In fact, it has been estimated that the number of federal estate tax returns filed for the year 2018 will drop from approximately 5,000 per year to 1,500 per year.
Additionally, the new law allows the heirs and beneficiaries of the decedent to receive the property inherited at its fair market value on date of death, thus being able to avoid capital gains taxes unless the property or assets are sold for more than their date-ofdeath fair market value.
Considering the amount of taxes imposed on one's I earnings and savings during one's life, many would consider this to be a just result.
While
So why does the new tax legislation make long-term care and elder law planning even more important? The answer is quite simple.
With the federal estate tax and the
Whether it be utilizing an
In conclusion, the significant minimization of the risks of being subjected to the federal estate tax for all intents and purposes highlights the importance for seniors to refocus their attention to their long-term care and elder law planning needs.
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