The national budget plan recently proposed by President Obama may remind estate owners in Florida that "permanence" isn't necessarily permanent. At the beginning of this year, a tax exemption for estates of $5 million or less was put in place, with legislators and the president calling the exemption "permanent." But, since there was no language in that budget plan that barred Congress from reconsidering the estate tax exemption, a new budget plan could lower (or raise) the exemption level.
Last year, the whirlwind of debate about the fiscal cliff and possible changes to federal tax law led some estate owners in Orlando to make some quick adjustments to limit tax liability. Many people with significant assets made lifetime gifts and created trusts to avoid a possible tax hike.
Estate planning is vital, especially for older persons. Wills, living trusts, insurance trusts and other trust forms can help ensure that a person's assets are divided in the fashion that the person wishes, instead of by probate courts and other outside agents, such as tax collectors. Elder law varies from state-to-state, and those who may split time between Florida and another state need to strive to understand how multiple addresses may affect their estate planning.
People are often advised to put their affairs in order to prepare for contingencies. Estate planning can ensure that a person's wishes are honored and help minimize future tax implications. When transferring assets according to an estate plan, however, it is important to keep current obligations in mind.