In 2017, individuals could give up to $5.49 million to beneficiaries without paying any federal estate or gift taxes. That amount was doubled for a married couple in New York or elsewhere in the United States. However, for 2018, that amount was raised to $11.18 million for an individual and $22.36 million for a married couple. In 2016, this would have meant that 4,142 families would have had to pay federal estate tax.
There is some question as to how increasing the exemption may have an impact on charitable giving. In a study of those with a high net worth, 95 percent said that they would give the same amount or give more if they didn’t have to pay estate taxes. In a 2016 U.S. Trust survey of people in this group, 23 percent said that they would increase their charitable contributions by varying amounts.
To gain income and capital gains tax relief under the conditions set by the Tax Cuts and Jobs Act of 2017, some are looking to the charitable remainder unitrust. In addition to getting this relief, the assets put inside such a trust are off limits to creditors and others. Therefore, individuals may be protected from scams or other negative situations that could rob them of their wealth as they age.
Taking time to create an estate plan may allow an individual to preserve assets or otherwise have greater control over them. The use of a trust may be beneficial because it can hold assets outside of an estate, which can avoid the need to go through probate. An attorney can often be of assistance in preparing these and other appropriate documents.