If you are a United Kingdom resident who already has an estate plan, you may well wish to review and revise it based on the Tax Cuts and Jobs Act that Congress passed late last year. As Market Watch explains, this new law exempts estates worth up to $11.2 million from having to pay any federal estate tax. This is double the amount of the prior exemption.
Since United Kingdom has no estate tax of its own, the new federal estate tax exemption means that unless you are ultra rich, your heirs will receive your entire estate tax-free when you die. In addition, the federal estate tax exemption for couples is now $22.4 million. What may make your existing estate plan obsolete, however, is the fact that in order to avail yourselves of this new exemption, the estate planning documents pertaining to both you and your spouse must contain the proper wording so as to bring about this portability aspect.
Necessity of periodic estate plan review
Since estate plans are set up by and for people, the people your estate plan benefits may have had significant changes in their lives since you first drafted your existing plan. Estate planning experts advise you to review your plan at least every three or four years to see if it still reflects your wishes.
In addition, your estate plan probably needs revising any time one or more of the following events occur:
- Your marriage, divorce or that of one of your adult children
- Birth of a new child or grandchild
- Your retirement
- Your receipt of a significant inheritance
- Your receipt of a significant lawsuit settlement or judgment
- Death of your spouse or of one of your children
In addition, if you or any of your heirs develops a chronic illness or becomes disabled due to an accident, your estate plan may need updating. This is general information only and not intended to provide legal advice.
