Will the new tax bill affect estate planning?

Key-2114044_640 (1)The new tax law that went into effect in 2018 will ultimately provide very little impact for most individuals or families.

The biggest change to the Federal Estate Tax is that now an individual can pass away with $11.2 million and a married couple with a total of $22.4 million and will not have to pay Federal Estate Tax to the Federal Government. The ultimate effect of this change will be minimal for most people in central Pennsylvania, as most individuals or couples do not possess that kind of wealth. However, this change does not affect the Pennsylvania Inheritance Tax, and taxes are still going to be owed to the State of Pennsylvania at the same rate as was previously applied.

The Pennsylvania Inheritance Tax will tax at 0% for a spouse, 4.5% for lineal descendants (children/grandchildren) and ascendants (parents), 12% for siblings, and 15% for everyone else, including nieces and nephews. Those rates were not changed by this tax law and due to the fact that most clients that we work with do not have more than $11.2 million singly, it will not provide much impact on estate planning for our clients. If you are unsure of whether it will affect you, it is important to talk to a professional to verify.

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