With the beginning of the new year, many people will be looking to make important changes to their lives. One of the most common goals for the new year will be to update one's estate administration plans in Maryland and elsewhere. It may be a good idea to do it this year, since estate tax exemptions have just changed based upon inflation.
In 2010, lawmakers passed legislation that raised the estate tax exemption limit to $5 million per individual. This means only an estate worth this amount or more will be subject to estate taxes for the assets above this exemption limit. Also, this exemption amount is adjusted for inflation. In 2015, the exemption amount will be $5.43 million, which is up from the previous exemption limit of $5.34 million in 2014.
Therefore, those who own less than the current inflation-adjusted exemption amount may want to consider re-examining their current estate planning strategies. Without having to worry about federal estate taxation, the details for how one distributes assets may need to be altered. On the other hand, one should also keep an eye on any changes to estate tax laws on the state level. While not all states have their own estate tax laws, Maryland does; therefore, it would be a good idea to be aware of the latest information.
However, when one does decide to make changes to an estate plan, it will require adjusting the legal language in estate-planning documents. Therefore, knowledge of applicable Maryland laws will be essential for comprehending the various legal implications involved when making decisions. Even minor mistakes can cause significant issues during estate administration.
Source: investors.com, "Estate Planning For 2015: How To Protect Assets From Taxes", Margaret Price, Jan. 2, 2015