High net worth individuals in Georgia should understand that changes to the tax code affect the way passing on wealth works. Right now, the tax code is very favorable to people who have complex estates and their potential heirs. The Tax Cuts and Jobs Act of 2017 made it possible for people to transfer $10 million to a non-spouse with no penalties. This figure is double the previous amount. However, there are signs that this could all change soon.
The way the TCJA is structured is complicated. For now, the measures that allow high net worth individuals to pass on their money without fear of estate taxes are only temporary. Metaphorically speaking, the sun might go down on them in 2025. There’s an even more immediate threat, though.
In 2020, governments at all levels have been spending a lot due to a variety of complex social situations. These governments are eager to recoup some of that money. If the Senate becomes majority Democrat, measures to reverse some of the TCJA could be introduced as soon as 2021. That’s why it’s imperative that high net worth individuals revisit their estate plans now. It can be a good idea to transfer assets to younger family members like grandchildren now while there are still no tax penalties for doing so.
One thing people can do to protect their assets and their families is to consult an experienced attorney. Lawyers who are experienced in estate law may provide advice about what deductions to take and other ways to plan for possible changes to the tax code.