What is the Inflation Reduction Act and How Does it Impact Estate Planning?

The Inflation Reduction Act was passed in August 2022. There was some back and forth on what was to be in this bill, and the proposals concerning your estate planning were taken out. This means that many of the estate planning laws did not change with the passage of the Inflation Reduction Act.

The Inflation Reduction Act and Your Estate Plan

There will be another time when congress will pass bills that will affect your estate plan, but it probably won’t happen this year since 2022 is ready to come to a close.

Here are a couple of items that will remain the same for your estate plan:

• The estate tax will remain for the very wealthy.
• The Generation Skipping Tax will still allow you to leave your grandchildren a $16,000 tax-free inheritance.
• You can still make unlimited payments directly to educational institutions or medical providers without incurring a taxable gift or affecting your $16,000 gift exclusion.
• Long-term capital gains will stay either 0%, 15% or 20% depending on your taxable income.

You’re not alone if you find the taxing and exemptions of your will or trust confusing. It can be hard to keep all the laws straight. This is why many people use a professional and experienced estate planning attorney to help with their will or trust. Doing it alone may cause your heirs to pay much more in taxes or lose some assets.

Oak Brook Estate Planning Attorney

An Illinois estate planning lawyer can help you write a will or trust that will leave as much money and assets as possible to your heirs. To talk to a qualified attorney in the Chicago area, contact the Estate & Probate Legal Group at 630-864-5835. 

AREAS WE SERVE: DuPage, Kane, Lake and Will counties.