Skip to main content
A Better Partnership


Jan 2018
January 24, 2018

It's Time to Review Your Estate Plan

The Act contains sweeping changes that will impact all aspects of tax planning to minimize estate, gift and generation-skipping transfer taxes. The significant new opportunities created by the Act, and avoidance of some of the pitfalls of an estate 
plan developed under old law, require careful  review of existing estate plan documents with knowledgeable estate planning counsel.

The new estate, gift and generation-skipping transfer tax exemptions are a significant increase over the exemptions available under old law. For example, the exemption was only $1,000,000 per person in 2002, and only $2,000,000 per person in 2008. Many older estate plans developed in years with these lower exemptions provided for the establishment of “exempt” or “credit shelter” trusts for children and/or grandchildren in an amount equal to the exemption amount effective at the time of the trust settlor’s death. Under the old rules, these “exempt” trusts would generally include only a fraction of a decedent’s assets, with the remaining assets typically passing to a marital trust for the benefit of the surviving spouse. However, the new and significantly higher exemptions may result in overfunding of the “exempt” trust (perhaps with all of the trust assets) and a failure to provide sufficient assets to the surviving spouse. You should carefully review your estate plan to ensure there are no concerns for the surviving spouse.

In addition, the higher estate, gift and generation-skipping transfer tax exemptions may also result in funding inheritances in ways you did not intend. For example, an older estate plan may fund a trust for grandchildren equal to your remaining generation-skipping transfer tax exemption, with the remaining assets passing to trusts for children.  A grandchildren’s trust funded using a formula tied to your remaining generation-skipping transfer tax exemption could result in a substantial underfunding of the trusts for children.

Improper funding could also result if a portion of your child’s inheritance was to pass outright, while the other portion is held in trust. In this case, the increased exemption might result in the entire share being held in trust based on the funding formula.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.



+ -