Dan Celia

Financial Issues

October 2017 – Q: Is there anything we should be doing as a retired couple to prepare for potential changes in taxes?

A: It is far too early to be thinking about changes as a result of tax reform. There will likely be much debate on any kind of substantial tax changes. One thing that President Trump did talk about on the campaign trail was the elimination of the federal estate tax or, as some call it, the death tax.

Until new tax reform is, in fact, made law, I would hesitate to begin any new trusts and would not spend a lot of money on legal fees, just in case they do eliminate the federal estate tax. Depending on the state in which you live, there will likely still be a probate for a state tax, and whatever Congress decides regarding the federal state tax will not be likely to affect the state inheritance tax.

You may see other changes in your tax bracket. Hopefully, your tax bracket could go down. But I understand we are likely to lose some of our current tax deductions. The country desperately needs tax reform and a simplification of the tax code. Hopefully, we will see that, and it will be advantageous for people in retirement.

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Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).

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