Estate planning is a complicated process that can sometimes be costly. You may wonder if estate planning fees can fall under a deductible business expense in order to minimize some of the fees. A Milwaukee estate planning lawyer can help you determine if your estate plan is eligible for deductions.
Tax Cuts and Jobs Act
According to the 2018 Tax Cuts and Jobs Act, estate planning fees are no longer deductible from your personal taxable income unless they are related to succession planning for small businesses. Outside of succession planning, estate planning is viewed as a personal expense and is not a deductible expense.
Before the Tax Cuts and Jobs Act in 2018, certain estate planning expenses were considered deductible if they exceeded 2% of your adjusted gross income (AGI). Itemized deductions included expenses that could be passed as business expenses, such as investment advice, maintenance of income-generating property, tax advice, will and power of attorney writing, and other document creation.
In 2025, Congress must decide whether to renew or change the act, so there is potential for changes in the near future.
Succession Planning
Succession planning for small businesses is the only estate planning expense that is considered tax deductible for costs associated with transfer of business assets, maintenance or protection of the business.
Succession planning ensures that your wishes are followed, and your values are maintained even after you are not in control of the business. Succession planning is especially important for family-owned small businesses to reduce conflict and costs in the future. The succession plan may include leadership plans, business goals, and financial needs. See our page on business succession planning for more information.
A Milwaukee business succession planning lawyer can help guide you on the best documents for your business and how to minimize your expenses.
Is Setting Up a Trust Tax Deductible?
While estate planning is viewed as a personal expense and is not tax deductible under the Tax Cuts and Jobs Act, it still allows you to deduct certain expenses of a trust. Tax preparation fees like generation-skipping transfer tax returns and fiduciary income tax returns, including the decedent’s final individual income tax return, are tax deductible under the Tax Cuts and Jobs Act. Contact a Milwaukee trust lawyer for more information about setting up a trust and if you are eligible for tax deductions.
Is Writing a Will Tax Deductible?
Under the 2018 Tax Cuts and Jobs Act, expenses associated with writing a will are no longer considered deductible. Estate planning is now considered a personal expense, not a business expense. However, if you include business succession planning in your estate plan, then certain expenses are business expenses and are tax deductible. Contact a Milwaukee will lawyer today for more information about wills and planning for the future.
Contact a Milwaukee Estate Planning Lawyer
A Milwaukee estate planning lawyer will help you maximize the return on your estate planning expenses. Estate planning is an essential, but sometimes costly, process. So consulting with an experienced attorney who understands possible tax deductions is important.
