With new tax laws come many new and interesting changes that may carry significant implications for those with existing estate plans. This is just one example of how creating and maintaining an estate plan is an ongoing task.
In order to ensure that the terms of the plan remain effective, it is important to review an estate plan regularly. Laws that affect estate planning change frequently. When changes such as the tax reform law recently passed by congress occur, they leave estate plans with potential vulnerabilities or inefficient means of protecting the estate itself.
One of the changes in the tax law that may affect numerous estate plans involves converting and reconverting Roth IRAs to traditional IRAs. Under the previous law's guidelines, an individual could convert a Roth IRA to a traditional IRA and still enjoyed the freedom to reconvert to a Roth until October 15th of the following year.
Under the new law, this ability to reconvert from a traditional IRA to a Roth is no longer available. While this may not cause issues for some, those who convert a Roth IRA to traditional may end up paying more tax than they intend, should the market lose value significantly after the conversion.
If you have an estate plan at all, now is a good time to revisit it and identify conflicts brought on by time, changing circumstances and relationships or simply changes in the law. An experienced attorney can help you carefully examine your plan and ensure that your rights and wishes remain secure for years to come, protecting the ones you love and making your wishes known clearly.
Source: Time, "Make This One Change to Your Retirement Account Now, Tax Experts Say," Elizabeth O'Brien, accessed Feb. 23, 2018