Considerations When Meeting with Your Estate Advisors

by Evelyn Blue, CEP

There have been many changes in the estate tax arena. The following summarizes the most routine items to consider as you meet with your attorneys, financial advisors, and accountants to create and/or update your estate plan. If you have not visited your will and estate plan recently, the recent federal and state legislative changes provide a great opportunity to make this a priority for 2018.

FEDERAL

  • The annual gift tax exclusion has been adjusted for inflation and has increased from $14,000 to $15,000 for 2018.
  • The basic exclusion amount for gift and estate tax has increased from $5.49 million to approximately $11.2 million in 2018. This means each individual can make gifts or reduce their estate amount by this $11.2 million. These provisions will remain in effect until December 31, 2025, unless Congress repeals or amends the current tax legislation. If there is no repeal or amendment, the basic exclusion will sunset after that date and revert back to the law in effect for 2017 with inflation adjustments.

DISTRICT OF COLUMBIA

  • Effective May 2, 2018, estate representatives who are responsible for filing an estate tax return will be required to register for an account, file and submit payment via MyTax.DC.gov. Please see the link to the estate tax brochure here.
  • In the beginning of 2018, the DC estate tax exclusion was equal to the Federal basic exclusion amount which is currently the $11.2 million. However, members of the DC Council joined in a bill to change the DC estate tax exclusion from $11.2 million to $5.6 million for 2018. This DC budget bill must be approved by Congress and is expected to be approved effective October 1, 2018. Assuming the bill becomes a law, a gross estate with a value over $5.6 million in 2018 will have to file an estate tax return. We will update our website when the bill officially is passed.

MARYLAND

  • The Maryland estate tax exclusion has increased to $4 Million for 2018. The Maryland General Assembly met and passed House Bill 308 which limits the estate tax exclusion to $5 million in 2019. In addition, Maryland will recognize portability between spouses in 2019, so a surviving spouse may elect to use, under certain circumstances, any portion of their deceased spouse‚Äôs unused Maryland estate tax exemption.

FLORIDA & VIRGINIA

  • Florida and Virginia repealed its estate tax in 2005 and 2007, respectively, and continue to have no state estate tax.