What is Estate Planning?
Estate planning is the term used to refer to planning what will happen to your property and assets after you pass on. It usually involves writing up wills, creating trusts, and even laying out healthcare objectives, guardianship, and burial plans. If you do not take the time to do this at pivotal life moments, what happens to your property will be decided in probate court after your death.
Can I Deduct Estate Planning Fees from My Taxes?
The specifics are laid out in the IRS’s Publication 529, but the simple answer is: mostly no. Estate planning fees used to be tax deductible, but that all changed when President Trump enacted the Tax Cuts and Jobs Act (TCJA) in December 2017. Previously such expenses could be included as itemized miscellaneous deductions, but the policy change removed that ability. The TCJA is set to expire in 2025 and the rules could shift again before that.
This being said, there are a variety of advanced planning methods that can help you avoid estate tax or reduce the amount. Estate tax is the tax levied on the value of a deceased person’s property and assets before they’re distributed to heirs. If you plan ahead, you can implement strategies that allow you to pass more of your wealth onto future generations and avoid excess taxation.