As we embark on the New Year, here are your Top 5 Legal Resolutions for 2018:
1. Your Estate plan: Create One or Review Yours
Estate tax laws have never been more favorable for New Jersey residents. The Federal Estate Tax and Exemption is now $10.98 million (per spouse) and, currently, there is no estate tax in the State of New Jersey. If you are a high net-worth individual or married couple, now is the time to take advantage of these exemption levels by transferring property out of your taxable estate, as this law will sunset in 2027 back to the current rate of $5.49 million (per spouse, and indexed for inflation) on a Federal level. With the New Jersey state-based estate tax in flux, plan for the worst in the years to come. If you already have an estate plan, now is the time to review to take advantage of these laws. These documents should be reviewed and amended every 3-5 years based on your life circumstances.
2. Your Accountant
The Tax Cuts and Jobs Act of 2017 was passed and there are many implications -- especially for New Jersey residents. Make sure you take the time to meet with your accountant so that you can understand the implications of this new law (1) how they will affect you; and, (2) what, if anything, you can do to plan for tax efficiency this year.
3. Your Aging Parents
Make sure you have a Power of Attorney and living will for Mom and Dad. You have gotten by without one up until now, but don’t wait until your luck runs out and something happens to them, which it inevitably will. These documents allow you to act on behalf of Mom and Dad in legal, financial and medical capacities according to their wishes. Typically, if you need these documents and do not have them, you can face serious financial and legal problems. Make 2018 the year to finally get this done!
4. Your Young Adult Children
If you have a child turning, or has recently turned, 18 make sure you have a Power of Attorney and living will on their behalf as well. Reminder- 18-year olds are full-fledged adults. You cannot use the parent card to act on their behalf for legal and financial matters; or to make medical decisions on their behalf.
5. Your Property Taxes
The Tax Cuts and Jobs Act eliminated the State and Local Income Tax, aka SALT, deduction. This, coupled with rising interest rates, may have a negative effect on the value of your home. Make sure to examine your property tax assessment, and any commercial property you may own, to determine if you are being taxed fairly.