Estate planning has recently become more stable as a result of decisions made by lawmakers at the beginning of the year. However, prior to that, planning for estate administration was in constant flux due to estate tax laws often changing. Now with the generous tax exemptions for estates in Maryland and other states, many people are deciding to solidify an effective estate plan.
Many were concerned about tax increases in early 2013 when the predetermined time for the increase in estate taxes was approaching. This scheduled change in the lowering of estate exemptions was termed by the media as the fiscal cliff. Lowering of estate exemptions would translate to an increase in estate tax liabilities for those inheriting the estates of loved ones who had passed away.
Financial planning experts were worried that lawmakers would lower the exemption level from $5 million ($10 million for couples) to $3.5 million or even as low $1 million. This caused many people to transfer ownership of their estates and businesses ahead of the anticipated fiscal cliff deadline. However, in a surprising move, lawmakers decided to extend the existing estate tax exemption level of $5 million for individuals and $10 million for couples.
Many experts believe that the laws on the estate tax will remain steady for a significant amount of time because lawmakers have too many other issues to deal with as of now. This could be the perfect time for people to create a plan for estate administration in order to take advantage of the relative stability in estate planning laws. However, when one is drafting these important legal documents, it is essential to have the proper legal language in place which can prevent an estate plan from being challenged in probate court in Maryland or in any other state.
Source: North Bay Business Journal, Estate planning enters time of greater certainty, Eric Gneckow, Sept. 30, 2013