Wrongfully Believed, Estate Planning Laws are written in stone and are subject to periodic reviews and adjustments, so it is essential to keep up with all the changes.
Estate planning is a process that extends beyond the drawing up of a Living Will and Trust and determination of a power of attorney. Not only are there certain financial responsibilities that must be attended to yearly if your estate is of a certain size, evolving life circumstances require that a person revisit and often revise their estate plans regularly. A general recommendation is that a person review the terms of their Will and other estate settlement matters every half-decade, or as triggered by a major life event that alters elements of the plans. Read on to learn more about which 2022 United States Treasury Department updates may affect what you owe on your estate, as well as when to review the status of your estate planning approach with a lawyer.
2022 Estate Tax and Lifetime Gift Exemption
Due to inflation, the United States Treasury updates the value of an estate that is required to file federal taxes as a separate entity. This year, the baseline estate and lifetime gift amount is up $360,000 to $12,060,000. While only a small margin of New Jersey citizens own estates valued over $12 million dollars, there are more than a handful, and they generate a massive amount of tax revenue for the federal government.
2022 Gift Exemption in New Jersey
Similarly, 2022 has seen an increase in the base amount of financial gifts a person may offer another without the donor being taxed. The 2022 gift exemption is $16,000 for single donors, up $1,000 since the 2021 tax year; and $32,000 for married couples.
Both estates and gifts continue to answer to the 40 percent federal statutory tax rate.
When To Review Your Estate Plans
Sure, it would be great to draft your Will, name your powers of attorney and beneficiaries, establish any trusts, and hit the road for retirement without ever looking back. But in reality, the development of an estate plan is a living process: it requires that you check in on and tend to it. Generally speaking, a good measure of time within which to review your estate documents and make any required updates is every five years. You can make it easier on yourself by creating a memorable rhythm; schedule a meeting with your estate planning lawyer for every Gregorian decade- and half-decade-marker: every year that ends with ‘0,’ as well as those that end with ‘5.’
If personal, family, and estate circumstances haven’t changed much, this is a sufficient system of estate review.
However, if any big changes occur in your field, it is important to revise your estate documents as soon as possible to reflect changes. Examples of life events that could trigger a review of estate plans are big changes in financial income, such as a new career, the ending of a personal business venture, or the receipt of an inheritance. Changes regarding children, such as childbirth, adoption, or the coming-of-age of a child for whom there is a trust fund set up require a revision of estate decisions. Marital changes, such as a new marriage, a divorce, or the death of a spouse, equally deserve an estate review. And importantly, setbacks to your health could wisely prompt looking over your estate affairs.
What Should I Do with the U.S. Treasury’s Latest Updates?
If you aren’t already in a cycle of filing estate taxes because you own an estate that supersedes $11 million, you probably won’t need to do anything given the U.S. Treasury’s inflation-induced updates to the estate and living gift tax exemption for the 2022 tax year.
If you are a financial donor, you have an extra $1,000 buffer for financial gifts in this 2022 tax year – from $15,000 to $16,000 – before taxes will be incurred.
How Can the Lawyers at Chamlin, Uliano & Walsh Help Me Catch up With the Latest Updates?
Do you think you may be subject to the 2022 updates to the estate or living gift tax exemption or the gift exemption? Or are you overdue for a revision of your estate planning approach? If so, the estate planning lawyers at Chamlin, Uliano & Walsh are here to help you organize your documents to ensure that, when the time comes, your assets are distributed to your desired beneficiaries without conflict or confusion that ties up your estate finances in legal battles.
We have years of experience helping clients align their estate planning strategies with the latest requirements and their own personal needs in Middletown, Rumson, Little Silver, Toms River, Colts Neck, Long Branch, Freehold, and other communities throughout Ocean and Monmouth County, NJ.
At the Law Firm of Chamlin, Uliano & Walsh, we understand how important it is to stay up-to-date when it comes to your financial legacy. Contact us at 732-440-3950 or toll-free at 888-328-9131 for a free consultation to discuss your estate. You can also fill out our easy request for a free consultation and we will get in contact with you.