Originally published on LinkedIn

Toward the end of a typical estate planning engagement, clients will often ask me when they should revisit their estate plans. I always tell them to pull out their plan and look it over and reach out to me to touch base at any time of personal change – a birth, a death, a marriage, a divorce or a material change in their assets – or, if they start to see headlines about the estate tax in the news frequently. Based upon the recent news, I have a feeling I will be hearing from a lot of those clients.

As you may have read, Republicans are promoting a plan that would eliminate federal estate taxes entirely – a huge relief to the 1,700 or so families who are expected to have to pay the tax this year. Bernie Sanders, among other 2020 Democratic Presidential candidates or potential candidates, has released plans that will close loopholes, increase estate tax rates and reduce the amount that a person can give away at his or her death before the federal estate tax is applied. None of the current proposals, however, impact the Massachusetts estate tax.

In Massachusetts, we may give away only $1 million upon our deaths before the Commonwealth starts to collect Massachusetts estate taxes. This Massachusetts exemption amount includes a broad array of assets - retirement accounts, the equity in any real estate, business interests, investment accounts and even life insurance proceeds (unless the life insurance policies are held and maintained in a very specific manner). This means that many Massachusetts residents will owe estate taxes no matter what the federal government does.

Married couples with over $1 million of assets can easily end up paying a significant amount of Massachusetts estate taxes, but using an appropriately drafted revocable trust can eliminate or reduce that tax, and also eliminate the need for any probate, while providing beneficiaries with a great degree of creditor protection.

In the end, regardless of which candidate or which plan you support – if any of them – the time is right to review your estate plan and make sure that it still reflects your intentions and that it is drafted with enough flexibility to respond to a changing estate tax landscape.

Have you reviewed your estate plan recently? What guidelines did your advisor give you for reviewing your estate plan?