Lawmakers are always constantly changing the laws which govern the nation. Most recently they passed new laws which made a significant difference in estate tax planning strategies in Florida and other states. The American Tax Relief Act of 2012 (ATRA) was passed in early January 2013 by lawmakers and then was promptly signed into law by the president. The new rules regarding the estate tax are giving consumers an advantage which they should be informed about.
Prior to the passage of the new legislation the estate laws already provided exclusion from the estate taxes. However, many times the amount allotted for exclusion is not used completely up after a person’s death. With the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, spouses of deceased individuals who had not used up their allotted exclusion amount would be given the remaining amount which had been unused. The surviving spouse would then be allowed to use the remaining exclusion amount for estate tax or gift tax exclusions.
This portability rule was set to expire; however, the ATRA, with its passage, made these portable exclusions permanent. Therefore, those who were waiting to make estate planning decisions may want to make the proper alterations in accordance to the new law. Currently, the estate tax exclusion amount is set at $5.25 million.
In order to take advantage of the new estate tax laws, the documents used to implement an estate planning strategy must be drafted and executed properly. These are legal documents which could be challenged in probate court in Florida or elsewhere. How the documents are drafted can make a difference in determining if they are legally enforceable and are in accordance with the wishes of the person signing them.