Estate and Gift Planning
A little planning can save thousands of dollars!
You can't take it with you, but failing to plan for your estate can mean that
the government, rather than your heirs, may get the major portion of your hard-earned
Over the coming years, the tax law gradually reduces estate and gift tax rates,
and the exemption amount increases. The estate tax will be repealed in 2010,
but the gift tax will be retained. Ironically, the estate tax will be reinstated
in 2011 unless Congress acts to make changes once again. In the midst of these
phase-in and phase-out provisions, a little planning can save thousands of dollars.
You may be surprised what your estate is worth. Add up the value of all your
assets. Don't forget life insurance which may fall into your estate. If your
total value exceeds the exemption amount, you should look into what a few simple
planning techniques can save your family at estate time. In addition, there are
some very effective estate planning ideas that can also cut your current income
Click here to
use an estate planning calculator to help you determine what your estate is worth.
Some planning possibilities:
Current tax law allows you to give away a certain amount each year to as many
recipients as you choose. Your spouse may join in the gift even if he or she
is not an owner in the transferred asset. This means that you could transfer
double the exempt amount each year to each of your heirs. To double the annual
exclusion yet again, you may want to include spouses of your children. The person
receiving the gift does not need to be related to you. These annual gifts do
not reduce your estate tax exclusion.
- Unlimited gifts
You can make unlimited gifts to pay for another individual's medical expenses
or school tuition as long as your payments are made directly to the institution.
- Property transfer
If you have property which is not needed for your retirement, maybe it is a candidate
for transferring during your lifetime. If it is a large income-producer, the
future income will be taxed to the new owner and not to you, plus the property
will be out of your estate.
- Spousal transfer
You can make unlimited transfers to your spouse either during your lifetime or
through your estate. There are no taxes on spousal transfers, regardless of size.
But leaving everything to your spouse may not be a good idea, since doing so
fails to utilize the lifetime exclusion amount in the estate of the first spouse
to die. Planning will allow you to use the exclusion in both estates, and you'll
be able to transfer twice as much to your heirs free of estate tax.
- Life insurance proceeds
With proper planning, certain life insurance proceeds can be kept out of your
For assistance with your estate planning, contact us.