Have my estate planning documents become out of date?

When lawyers draft estate-planning documents they are made with current laws in mind. However, estate-planning laws have changed in some key ways over the last few decades. Here are 4 key dates that have changed estate-planning. If your documents created before these dates it may be time to update them.


The first date to look out for is April 14, 2003, which is when the privacy rules under the Health Insurance Portability and Accountability Act first took effect. Although HIPAA was enacted in 1996, its privacy regulations were not enacted until several years later on April 14, 2003.

This act brought about much stricter guidelines regarding the disclosure of a person’s health information to third parties without explicit permission. Now, only a few people are allowed to receive this information, which becomes a much bigger issue if the person becomes incapacitated, such as in Terri Schiavo’s case. Now, a durable power of attorney is needed to make important health care decisions for loved ones. If your will, revocable trust, durable power of attorney or health care power of attorney was executed before this date, your executor, trustee, or agent may not be able to effectively work with your medical care providers or insurers.

State estate taxes

Before 2001, there was a federal credit for state death taxes (the size of the credit varied with the size of the estate The Economic Growth and Tax Relief Act of 2001 phased out the credit by 2004. As a result, since 2005, state estate or inheritance taxes apply on top of any federal estate tax. Today, 15 states impose their own state estate tax, seven states have an inheritance tax and a few states have both. Florida is not one of these states, as Florida estate tax is based solely on the federal credit.

Higher Threshold

In 2010, the enactment of the Tax Relief, Unemployment Insurance Reauthorization and Job creation Act of 2010 increased the federal estate tax exclusion to $5 million for 2010 and indexed it to inflation after that. For 2015, the federal estate tax exclusion is $5.43 million. Before 2010, the threshold for owning federal estate taxes was much lower, the exclusion was just $600,000 in 1996 for instance. This act basically eliminated the federal estate tax for thousands of people.

This means that many estate-planning tools, such as trusts, may no longer be needed. Before, an estate was often divided into many trusts. Multiple trusts may no longer be needed to avoid those expensive estate taxes. Now it may be more practical to put these funds into one trust to avoid multiple trust fees depending on the size of the estate. At the Law Office of David Goldman, we can provide a simpler estate plan may be needed, or petition a court to provide your trusts with a judicial modification.

Sharing exclusions

This is an important change in estate planning for married couples with combined taxable estates exceeding the federal tax exclusion. The American Taxpayer Relief Act of 2012 lets an executor transfer a deceased spouse’s unused federal tax exclusion to a surviving spouse, which can be an important estate-planning tool.   This means the surviving spouse can stack the deceased’s exception onto his or her exemption.

This exemption has replaced some of the old methods for transferring assets between spouses, such as creating a credit shelter or using a trust. The new exemptions could allow a couple to a save considerable amount of money.

For more information on how to update your estate-planning documents, contact our office today.

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