When it comes to estate planning, it is crucial to stay informed about changing laws that may affect your estate. An area of law with relatively frequent changes that can impact estate plans is tax law. Changes in tax law can have a major effect on your estate, so it is always a good idea to speak with your estate planning attorney to make adjustments to your estate plans from time to time, as needed.
For your ongoing legal needs in the area of estate planning, contact the attorneys at Galanti and Copenhaver. Our attorneys have many years of experience handling all different types of estate planning cases, from preparing initial documents to handling cases in litigation over contested issues. Give our office a call today to schedule a meeting with one of our attorneys to discuss how potential upcoming changes in the law may impact your estate plans.
Preparing for Potential Estate Law Changes in the Upcoming Year
Although we cannot predict the future and know what legislation will pass or who will win any of the upcoming elections, the one thing you can do is get your estate plans in order and be prepared for any outcome. In some cases, even if new legislation is enacted, existing estate plans (for example, a trust) may be able to remain unchanged. In other cases, the new legislation will apply retroactively, impacting your estate plans along with many others who are similarly situated. The smart thing to do is get started with preparing your estate plans as soon as possible.
It will be to your benefit to begin estate planning earlier rather than later. There are certain advantages to making your estate plans over a longer period of time, giving you the opportunity to fully assess your goals and ensuring that the steps you are taking with your estate plans serve to advance these goals.
Proposed California Tax Law Changes for 2020
California residents will have the opportunity to vote on a state-mandated tax on the assets of the wealthy in the upcoming 2020 election. This tax has been proposed in an effort to generate nearly one billion a year for low-income families in California. The revenues from the implementation of this bill are slated to work on resolving socioeconomic inequality by establishing programs that benefit low-income families. One such use of this money is to create child savings accounts.
Senate Bill 378, if passed, would result in a tax placed on estates that exceed the amount of $3.5 million for an individual person. This is similar to the federal estate tax that was enacted several years back. However, it is important to note that the proposed bill would allow for a phase-out once that person’s estate reaches the current federal requirement in order to avoid a situation with double taxation. If successful, this bill is likely to impact the estates of wealthy California residents.
Reviewing Your Estate Plans Made Many Years Prior
Estate planning is a long-term process. Even after you believe everything has been accounted for and your estate plans are complete, laws and individual circumstances frequently change and impact these existing plans. For example, in recent years, there have been temporary increases in exemptions allowed for estate and gift taxes. You may want to consider having your estate plans reviewed to determine whether you can take advantage of these increased exemptions to benefit your estate and your beneficiaries in the future. It is often worth the time and effort.
California’s Uniform Trust Decanting Act
A recent trend in estate planning is trust decanting, or pouring over assets in one trust into a new trust that has more favorable terms. The state of California adopted the Uniform Trust Decanting Act in September 2018. It became effective at the beginning of this year, January 1, 2019. Under the new law, trustees are permitted to modify existing irrevocable trusts under certain circumstances without the consent of the beneficiaries and the settlor and without court approval. If your estate plans include a trust that was created years ago, it is a good idea to speak with an experienced estate planning attorney to have the trust reviewed to see if you can take advantage of this new law. As trusts are a commonly used form of estate planning, many California residents may be able to benefit from the Uniform Trust Decanting Act.
The attorneys at Galanti and Copenhaver can help you with all of your estate planning needs. Contact our office today to schedule a consultation with an attorney who can help you take advantage of the estate planning trends for the upcoming year 2020.