Floridians are keenly aware of tax implications for everything they do. One of the benefits of living in the Sunshine State is the absence of a state income tax. Minimizing taxes and finding useful tax-deductible strategies can save significant money.
This is true with their business and personal needs. For those who are taking the wise step of moving forward with estate planning, a question that is often asked is if the fees accompanying it are tax-deductible. With these and other questions about the process, it is important to seek experienced assistance to avoid missteps.
Estate planning fees are not tax-deductible
In the past, people could deduct the fees associated with estate planning. However, the Internal Revenue Service (IRS) changed its rules based on the Tax Cuts and Jobs Act and estate planning fees are no longer tax-deductible.
Before this change, there were times when these fees could be deducted on a person’s taxes. If, for example, the services were to produce or collect income or receive tax guidance or planning, it might have been deductible. The new law changed that.
When people are crafting their estate plan and use strategies that will generate income, they were previously able to deduct advice they received in constructing these instruments on their taxes. That is no longer the case. Even before the new law, there were certain fees that could not be deducted. A simple will, getting a living will or power of attorney were not deductible at all.
Certain aspects of the new law including those that left people unable to deduct estate planning expenses could eventually revert to what they were before. After 2025, some parts of the law will “sunset.” Also, there is always a chance that a new presidential administration and lawmakers will revive the deduction. Therefore, it is imperative to have legal advice from those who are up to date on all the laws. This is vital with estate planning.
Even if it is not tax deductible, it is important to have help with estate planning
People who have been fortunate enough to have a successful life and accrue professional and personal assets like a business, a home, a vacation home, automobiles, a vast portfolio, collectibles and more should try to find ways to save money when they can. In fact, anyone who is creating an estate plan should have assistance. Although estate planning fees are not tax deductible, there may be other ways to save money and make sure property passes to loved ones in the most efficient and inexpensive way possible. Having help that is tailored to the individual circumstances is key from the start.