The 1997 Taxpayer Relief Act contains many changes which will have a significant impact upon estate planning and family law issues. Here are some of the changes. This summary is not meant as legal advice and you should consult with a tax specialist before making any decisions or plans.
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Estate Planning impact |
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Family Law impact |
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| For gifts made or persons dying in the year | Exemption amount |
| 1998 | $625,000 |
| 1999 | $650,000 |
| 2000 and 2001 | $675,000 |
| 2002 and 2003 | $700,000 |
| 2004 | $850,000 |
| 2005 | $950,000 |
| 2006 | $1,000,000 |
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Currently there is an annual exclusion of gifts up to $1,000 per person. this amount will be indexed to the annual CPI for years after 1998. |
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There is a new exclusion for up to $1.3 million for a family owned business interest under a number of specific and somewhat complex circumstances. Check with your tax advisor. |
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There are a number of other changes to the law that apply to specific situations to
complex to discuss here. See your tax advisor. |
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The capital gains tax rate has been lowered for non-corporate taxpayers. |
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Replacing all the former exclusions, there is a new exclusion of up to $250,000 per person upon the sale of your principle residence. You must have used it as your principal residence in 2 of the past 5 years to qualify. This is an important change in divorce situations. Formerly, only the party in residence could claim an exemption and the non-resident could not. |
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There are new child tax credits and education tax breaks in the law. Consult your tax advisor for specifics. |
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Additional changes affecting IRA's, pension funds and business interests are included in the new law. Please consult your tax advisor for specifics. |
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To order the estate document set online, click here |
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To order your workbook, click here |