The largest tax reform in over three decades has now been signed into law. The Tax Cuts and Jobs Act (act) became law on Dec. 22, 2017, and will have wide-ranging implications for many industries. This article will address some of the possible estate planning possibilities.

Major elements of the act include an increase to the estate tax, the gift tax and the generation-skipping tax exemptions while preserving a step-up in basis at a taxpayer's death.

Background

The original U.S. estate tax was created in 1916 and imposed a tax on estates over $50,000. The exemption limit has risen over the years and in 2017, the exemption was $5.6 million for an individual or $11.2 million for a married couple under the portability provisions. The Tax Cuts and Jobs Act doubles the exemption to $11.2 million for individuals and $22.4 million for married couples. As in prior years, these exemption rates are indexed for inflation, but now using a chained consumer price index approach