The Savage Truth on Money, 3rd Edition

CHAPTER 16The Savage Truth on Estate PlanningIt Pays to Plan While You Can

It’s the one subject people absolutely hate to talk about or think about. It’s the one subject guaranteed to cause an argument or stop a conversation: What would happen if you suddenly died tomorrow? (See, you really wanted to skip this chapter!)

But like all other distasteful tasks, once you’ve made an estate plan—a simple will or living trust—you’ll feel a whole lot better when it’s done. You’ll have the satisfaction of knowing that your loved ones will be taken care of and that the government will not be in charge of your assets. And the Savage Truth is that the entire process is easier and less expensive than you think.

This subject is not about saving on estate taxes. The most recent changes to the estate tax law, part of the Tax Cut and Jobs Act of December 2017, lifted the burden of federal estate taxes so they will be paid only by wealthy individuals whose estates exceeded $11.4 million or couples with wealth of more than $22.8 million (in 2019). I’m guessing that pretty well exceeds the concerns of most of my readers.

But that law is scheduled to expire on January 1, 2026, and the exemptions will revert to the previous $5.49 million, plus an inflation adjustment. Or Congress might decide to pass a law in the interim, which could impact the level at which federal estate taxes apply. At the current levels, the federal taxes currently do not impact a significant number of estates. An estimated ...