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As part of the sweeping tax reforms enacted in December 2017, there was a significant increase in the gift and estate tax lifetime and at death exclusions. Under these changes, a married couple who has not previously made any taxable gifts can now leave almost $ 22.4 million to their heirs without a Federal Estate tax. In addition, the annual exclusion for gift tax purposes, which is indexed for inflation, is increased for 2018 to $ 15,000 per donee.

The magnitude of the exemption amount may cause a lot of people to drop estate tax planning from their radar, but this is still an area that requires thought and attention. In recent years, many wills have been drafted with formula clauses, and the significant increase in the exemption may yield undesirable results.

In addition, many states, including New York, have an Estate tax with exemptions much lower than the Federal. If not properly structured, wills with formula clauses could inadvertently cause higher state estate taxes.

Reviewing your estate plan and documents every few years is prudent, but it is essential whenever there is a major change in your personal circumstances or in the Federal Estate tax rules.

Please contact your Janover professional to assist you in this important exercise.

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