If you are one of the many people in Minnesota who has had an estate plan in place for a while, you might want to make now the time you re-evaluate your plan. One reason that makes this a great time to review and potentially update an estate plan is the new tax law that took effect earlier this year.
As reported by Forbes, the Tax Cuts and Jobs Act affects a lot more than just your annual federal tax return and income tax payments. Your estate plan can have a significant impact on your current and future tax liability as well. Because the new law essentially reduces the benefit of itemizing deductions in what had become the traditional sense, it may be wise to investigate other options for reducing your tax bill. For people with high incomes, the new law also eliminates prior limits on deductions.
This combination makes the creation of a charitable remainder unitrust something worth your consideration. You can avoid immediate capital gains taxation, enjoy annual payments based on a percent of the principal amount in the trust and provide funds to a charitable organization or cause. A CRUT may last for the duration of your life or may be setup to last for a finite number of years.
If you would like to learn more about how the new tax code may influence your estate planning strategy and even may necessitate a review of your plan, please feel free to visit the trust and taxes page of our Minnesota estate planning website.