2021 is nearly over, with a new year around the corner. While this is generally a time of celebrating holidays and preparing for the new year, there are some estate planning considerations that should be taken into account before 2021 is over. Although this may not seem like a top priority, there are timing considerations because of proposed legislation that may impact estate plans by 2022. Below are some common items that should be reviewed and discussed with an estate planning attorney by the new year.
Estate and Gift Tax Exemption
While Texas does not have a state estate and gift tax, there is a federal tax. The estate tax is a tax levied on a person’s estate plan and is based on the amount of assets a person is giving to others in their estate plan once they have passed. Currently, estates under $11.7 million are not taxed; however, this amount is set to roll back to a lower level soon. While the current plan is to lower the exemption amount to $5 million in 2026, there are discussions in Congress about speeding up this rollback to the beginning of 2022.
Laws can be quickly passed through Congress, so it is difficult to predict whether this effort to lower the estate tax exemption by 2022 will be successful or not. Because of this, individuals should speak with an estate planning attorney who will advise them on whether their estate is likely to be impacted by this federal tax change—and changes they can make to their estate plan if they are impacted.
Reviewing the Estate Plan Carefully
Even for individuals who are not concerned about the estate tax change, the end of the year is an excellent time to get in contact with an estate planning attorney. Since the estate plan was drafted, family relationships may have changed, or people, like those named as guardians of a person’s children in the event of an untimely passing, may have moved far away. This may impact the details of an individual’s estate plan, and they may want to change it based on current circumstances. Additionally, by speaking with an attorney, they will review the estate plan and advise clients if any changes need to be made to comply with state or federal regulations.
Estate planning can be difficult and stressful when laws are constantly changing; by speaking with an estate planning attorney, they can reassure individuals that their estate plan is still valid and will assist their loved ones after their passing.
Contact a Houston Estate Planning Attorney
If you or a loved one has not had your estate plan reviewed recently, contact the experienced Houston estate planning attorneys at McCulloch & Miller, PLLC. With decades of experience, our attorneys will make sure your estate plan is complying with federal and state laws and will advise you of any necessary changes that should be made. Additionally, if you do not have an estate plan in place, our attorneys can assist you with this too. To schedule a no-risk consultation and to speak with one of our lawyers today, give us a call at 713-333-8900.