In 2016, most people will not need to use tax-based planning in their Estate Plans. In fact, only about 0.5% of people will die with an estate valued over the current federal estate and gift tax exclusions amount: $5.45 million. However, if you’ve been paying attention to Congress and the federal estate and gift tax exclusion amounts over the last decade or so, you would know that Congress is unpredictable and that the exclusion amount changes quite often. So, it’s important to create a plan that will work for your current tax position, but also be willing and able to regularly review and revise your plan for changes in the law, including changes to the federal estate and gift tax exclusion amount.
Case in point, President Obama recently published his proposed budget plan which includes changes to the tax code. Among many other changes, Pres. Obama proposed (1) changing the estate tax exclusion amount back to the 2009 amount: $3.5 million; (2) lowering the gift tax exclusion amount to $1 million; and (3) raising the tax rate from 40% to 45%.
For most people, that’s not a significant change – they still don’t have $3.5 million in taxable assets and don’t intend to make $1 million in gifts. However, for some it may make a world of different. The bigger issue is that it signals an intention to eventually lower the exclusions and impose a tax burden on more people. The pool of people impacted by estate taxes will most definitely increase from 0.5%.
Estate tax exclusion amounts is not the only area of law that could change in the future. We are at the mercy of Congress and the state legislature, and sometimes changes they make can undermine your entire estate plan. It’s important to stay invested in and up-to-date on your estate plan and be willing to regularly review it to make sure it will always do what you intend.
Cheers,
Paul Yokabitus
Author Bio
Paul Yokabitus
Founder & Estate Planning Lawyer
Paul Yokabitus is the founder of Cary Estate Planning, where he helps North Carolina families protect what matters most through wills, trusts, probate, and special needs planning. Known for his “planning, not paperwork” approach, Paul turns complex legal concepts into clear, practical strategies so clients feel informed and confident at every step. He has been recognized as a Business North Carolina Legal Elite attorney and a Super Lawyers Rising Star, and was named to the Triangle Business Journal’s 40 Under 40. A graduate of Campbell University School of Law, Paul lives in the Triangle with his wife, Alix, and their two sons.
Linkedin | Avvo | SuperLawyers
How We Help North Carolina Families
Paul and his team at Cary Estate Planning are fully committed to creating a personalized experience to develop thorough and comprehensive estate plans. They value their clients and go above and beyond to make sure that no details are missed. I would highly recommend Paul to anyone looking to create an estate plan.
I was referred to Paul by my Real Estate Attorney and I could not say enough about how exceptional the client service has been from everyone I spoke to. The communication is prompt and I feel like they really took the time to answer all my questions and set things up exactly as I wanted, but also recommended things to make it easier on my family down the line.
After attending one of Paul’s estate planning seminars, my husband and I knew we wanted Paul to assist us with our estate planning. His honest, professional approach to this necessary part of life put us at ease with the process. We will continue to recommend Paul and Cary Estate Planning.
We had a great experience working with Paul Yokabitus and the team at Cary Estate Planning to set up our Will and Estate Plan. The process was clear and easy, and in the age of COVID, our signing session was very well done, easy, and safe.
The Cary Estate Planning team will make sure that you have the information you need to be confident in your estate planning decisions. I learned so much from videos, a one-on-one in-person consultation, the website, emails, and a newsletter mailed the old fashioned way. The fee is very reasonable given the importance of estate planning. No matter the size or number of your assets, don’t procrastinate like I did!
Paul is a masterful attorney. He’s very good at taking your intentions and defining that into a durable Trust and Will. Best of all he is as simple and plain-spoken as you like. Or as fast as intellectual as you may be. It’s all about your your speed and your desired outcomes. Would strongly recommend this firm.
Trusted Estate Planning
Attorney Offices in Cary and Raleigh
Capability to meet virtually to help all NC residents
