Many of us understand the need for estate planning – for preparing a Will, A Health Care Directive, a Power of Attorney, and other related documents so that, when the time comes, our wishes will be respected and the needs of our loved ones addressed. But, here’s the thing. Situations change over time. Our assets, the people in our lives, our health-related needs and those of our loved ones, new government laws – any of these may require revising an estate plan. We believe that every three to five years is optimal.
New government laws, and how they impact estate plans, are particularly tricky. Many people are unaware of these laws; or, if they are aware, they find them difficult to understand.
For example, did you know that
- in April 2003, a HIPPA privacy rule was enacted imposing strict guidelines on who can access your protected health information without your explicit permission. So, if you want your daughter to communicate with your medical insurance provider, she needs to have a written document, executed by you, with very explicit language mandated by HIPPA. If your estate plan was done before 2003, it’s definitely time to see your attorney.
- in addition to the Federal estate tax, New Jersey imposes separate estate and inheritance taxes. Before 2001, a federal tax credit offset these NJ taxes. As of January 2005, the federal tax credit was eliminated. If your Will or Trust was prepared before 2005, consulting with your attorney to plan for these state taxes is advisable.
- in December 2010, the federal estate tax exclusion rose to $5 million dollars (indexed to inflation after that). As of 2016, you may leave up to $5.45 million to your heirs and pay no federal estate or gift tax! If you drafted your estate planning documents before December 17, 2010, see your attorney to ensure that all necessary documents are updated to avoid unexpected or unfavorable results.
So what’s the lesson here? Nothing stands still – including tax laws. Reviewing your estate plan every three to five years helps ensure that you get it right.
Getting Legal Help
Experienced Estate Planning Attorney, Elga A. Goodman, can help you understand the latest Federal and New Jersey estate and inheritance tax laws and how they impact your estate planning needs. She can work with you to develop a plan that’s right for you and your loved ones. Contact us today at 973-841-5111.
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