How Has Your Estate Planning Been Impacted By the New Tax Law

Now that tax season is over.  Take a moment to ask yourself if your Estate plan needs to be reviewed.  Many individuals and families are finding they may need to check in with their financial planner and attorney to understand how the new tax law may impact their estate plan.  

An Estate plan, just like a piece of real estate, needs periodic maintenance and care to make sure it’s in good shape when you need it most. 

Provisions in the newly passed GOP tax plan mean it’s time to review a handful of key areas in your estate plan. Below are five areas you should pay attention:


1.  Will the new tax law impact my estate taxes?

The new tax law exempts a portion of an estate’s value from what is commonly termed the “death tax,” just like to prior law did – but the thresholds have changed. The previous exemption limit was $5.6 million; this was bumped up to $11.2 million. This increase in the death tax exemption means that many wealthy families will see relief and a need to simplify their estate tax plans. 

Under the new threshold, experts estimate around only 5,000 estates per year will be subject to taxation above these limits. In other words, it’s a great time to be rich – but not too rich.

Remember, that Estate Tax differs from Inheritance Tax.   


2.  I’m married, so what happens to my surviving spouse?

You’re probably confused thinking about this because usually one spouse dies before the other. The exemption limit for married couples relates to portability, which is the term for how a surviving spouse avoids estate taxes on what they inherit from the deceased spouse. Portability as a rule was instituted back in 2012, and the new law preserves it.

An estate plan can invoke portability rules by using specific language, without which a spousal estate may have to create a bypass trust that will cost a lot of time, money and likely reduce the inherited amount.


3.  How will my state estate tax be impacted?

Right now, about 15 states have some type of estate tax. (ConnecticutDelawareDistrict of ColumbiaHawaiiIllinoisMaineMarylandMassachusettsMinnesotaNew YorkOregonRhode IslandVermont,  and Washington)

Out of the states with some type of estate tax, a portion link to the federal exemption limits – so these will automatically increase. Others are completely independent, so unless these state legislatures act, nothing will change. 

However, with some states having exemption limits as low as $1 million, there is a good chance of being exempt from federal estate taxes and potentially owing state estate taxes – so proper planning is still needed for many families who live in these states.  


4.  Will my estate plan fulfill my wishes and avoid unintended consequences?

Well, it depends….form-letter or template documents can cause outcomes that don’t align with your exact intentions and wishes. If you have certain needs or desires, you will still need to work with an estate planning attorney as well as an accountant to set up or revise your estate plan. 

On the financial side, A Power of Attorney (POA), without specific provisions that otherwise limit or prevent specific actions, has the potential to allow the managing agent to engage in a variety of undesirable behaviors. An example is, the POA’s managing agent may be able to legally make gifts to whomever they want (including themselves), change beneficiaries on financial accounts such as life insurance or 401ks, or discontinue financial support to a disabled relative, just to name a few. 

Ultimately, the only protection against someone exercising unwanted power over your estate when the time comes is to be specific and document your wishes ahead of time.


5.  How often/soon should I review my estate plan?

A general industry rule of thumb is approximately every three years, assuming no significant life changes. 

However, anytime you experience a major life adjustment such as a divorce, birth of children or grandchildren, the purchase or sale of a business, retirement or major change in health status, you need to notify your financial planner, and estate-planning attorney to revisit your estate plan and make any needed changes.


Over all, changes in circumstances drive the need to modify estate plans – and the new tax law is one of those types of changes. The expansion of exemption limits may mean you have more money to go around, changing your wishes; or it could mean that previous plans are no longer necessary.  

To truly be certain if your Estate plan still fits your Financial plan (or if you need to create an Estate plan) set up a conversation with your financial planner to discuss.  If you don’t have a financial plan or you don’t work with a financial planner, now is the time to find one.  We always suggest working with a Certified Financial Planner™  the difference between a Certified Financial Planner™ and an advisor who refers to themselves as a financial planner are significant.  You can research CFP® in your area at the CFP Board’s website.  As always, you should consult with your tax planner and estate-planning attorney to discuss your particular situation.    


This information is general in nature and may be subject to change. Financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.

Securities offered through NMS Capital Advisors, LLC, Member FINRA/SIPC. Advisory products and services offered through Castle Wealth Advisors, LLC, a Registered Investment Advisor. NMS Capital Advisors, LLC and Castle Wealth Advisors, LLC are unaffiliated entities.

Heather Castle

I am originally from Virginia and grew up in Tuscaloosa, Al.  I completed both of my degrees at the University of Alabama.  My undergrad degree in Finance and then later my MBA from the Manderson Business School through their Executive MBA program. 

I started Castle Wealth Advisors, LLC because I wanted to provide ethical and approachable financial planning and investment management to individuals and business owners, concerned with their financial futures, regardless of age, sex, race, or net worth.

I've always believed clients should work with reputable, qualified, and experienced advisors.  So it was important to me to gain industry experience as well as pursuing additional industry specific designations.  I have passed the following licensing exams:

     Series 7, General Securities Representative

     Series 66, Investment Advisor Representative 

     Series 9 & 10, General Securities Sales Supervisor

     California Life, Health, and Variable Insurance (License #0K01554)

I have been in the financial services industry since 2006 and have work with many differing type of clients over the years.  One thing I know to be true, everyone wants to feel heard and cared about.  Meaning everyone I have ever worked with wants to feel like their desires, wants and needs have been heard and taken into consideration when speaking about their personal financial matters.

Many people have the same goals, they just express them differently, and then there are a few who’s view and desires are completely different.  This is one of the aspects I love about my job.  The PEOPLE!  I get to meet some many interesting people and they challenge me daily.  No day in my line of work is the same.  Today I could be planning for a family who owns a small business and tomorrow working with a women going through a painful divorce.  Listening and building financial plans and strategies around personal needs is why many of my clients have said they do business with me and have stayed with me. 

Another reason I love my job… I get to truly HELP people.  I get to make a living and provide for my family while helping others.  Over my career I have felt a need to dive deeper into financial planning and working with high net worth individuals who have greater planning and investing needs.  Listed below I have highlighted a few of the areas I specialize in:

·      Women in transition (divorce/ death)

·      Corporate Executives

·      Young Entrepreneurs

·      Small Business Owners

·      Family with Special Needs Members

·      Complex Retirement and Estate Planning Needs

Currently I live in Brentwood and really enjoy the West Side of Los Angeles.  I am actively involved with the Junior League of Los Angeles.  I have a passion for trying new things and new experiences.  So, in my free time I love traveling and scuba diving.  I also am interested in learning French, taking pilot’s lessons and dancing the tango!