Welcome to 2017


For the past several years, there have been very few changes to the estate planning landscape, and the same holds true for 2017. However, with the presidential inauguration upon us and the change in administration, there may be many changes to come this year that will most likely take effect in 2018. Below are some of the changes in the law that became effective January 1, 2017 and that may affect you and your estate planning needs.



For 2017, the amount that a taxpayer can transfer on his or her death was increased from $5,450,000 to $5,490,000 (an increase of $40,000), but the estate tax rate is unchanged at 40%. This means that if the aggregate of the transfers made as the result of a taxpayer’s death that is greater than $5,490,000, the amount over that threshold will be taxed at 40%. Tools that estate planning attorneys use to double that amount for married taxpayers (to take advantage of both spouses’ shares) are still in effect.

The annual gift tax exclusion remains at $14,000 so that each taxpayer can give $14,000 each year to each recipient without any tax consequences.

Non-citizen spouses can be gifted $149,000, an increase of $1,000 from 2016 (compared to the unlimited marital gift deduction for citizens.)



Trusts are taxed at a higher rate than individuals. A single individual does not pay the highest income tax rate (39.6%) until he or she reaches $418,400 in income, and a married couple filing jointly does not pay the highest income tax rate until they reach $470,700 in income. However, when a trust is taxed at trust income tax rates, it reaches the same highest income tax rate (39.6%) at $12,500 of income. This rate does not apply to revocable trusts during the life of the trust creator.



A new law was passed in California that owners of internment rights must, at the time of acquisition, designate successor owner(s). If they do not designate a successor owner, it will go to the original owner’s heirs at law.



Personal representatives and trustees now have access to a decedent’s digital assets and electronic communications. After your death, your trustee can now preserve and transfer your photos saved into the cloud, your emails, and any other “electronically stored information.” However, if you have given someone custodial authority online, that designation will override a trustee or personal representative. If you have given your trustee or your agent the authority over your digital assets, that designation overrides anything in a “terms of service” agreement.



There is now a statewide POLST (Physician’s Order for Life Sustaining Treatment) registry to record the level of treatment that an individual wishes to receive at the end of his life. When your physician signs a POLST, he or she will automatically register it with the statewide registry unless you indicate that you do not want it registered. This registry is funded for 2.5 years.


The biggest news is that with the new administration, the estate planning landscape will probably change. I believe that the best way to prepare for change is to build flexibility into your estate plan. If you have questions about how much flexibility is right for you and how to bring more flexibility to your plan, please feel free to call.