This is Estate Planning Week across Massachusetts and the rest of the country. The importance of estate planning should not be underestimated. While most people think about estate planning when it comes to their home, beneficiaries, guardians and asset distribution, there is another area that shouldn't be overlooked. Tax planning for the elderly is very important, and the American Taxpayer Relief Act of 2012 has changed the way that assets can be left for spouses, partners, family and other heirs.
Because of the ATRA, you can now leave as much of your assets as you want to your spouse. You can also leave up to $5.25 million worth of assets to your children or to a trust tax-free. If you are married, then you can leave $10.5 million worth of assets to a non-spouse. Before the ATRA, many people created wills that said they wanted whatever was left over after estate taxes to go into a family trust. This meant that the surviving spouse could be included or excluded in a marital trust. Because the ATRA has a higher exemption, some families could find that 100 percent of the estate can end up in the family trust. The spouse could be left without anything except the trust.