The Affordable Care Act and Your Estate

The Supreme Court’s recent decision to uphold the Affordable Car Act effects more than just your health care and your health insurance. It could also have important implications for your estate plan that you should talk to an estate planning attorney about.

The Affordable Care Act implements a new 3.8% surtax on investment income, including investment income of estates and Trusts that is not distributed to heirs and beneficiaries. It only applies to net investment income over approximately $12,000. Of course, any investment income that is distributed to heirs and beneficiaries will be applied to calculate their potential liability for the new tax. This new investment income surtax goes into effect January 1, 2013.

The estate tax is also scheduled to change at the same time. Both of these tax issues could effect your current estate plan, so you need to review your estate plan with your attorney before the end of this year and make any necessary changes to your plan. You cannot afford to wait until the tax changes go into effect. Prepare for the new laws now, so that you and your estate do not face an unexpected tax next year.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.