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 money. Why? Because the top estate tax rate is a whopping 55%!
may be aware of the $675,000 lifetime exclusion for gifts and estates
($1,300,000 for qualifying family farms and small businesses). But the
amount over that may be taxed at rates starting at 37% and going as high as
55%. 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 exclusion, you should look into what a few
simple planning techniques can save your family at estate time.
addition, there are some very effective estate planning ideas that can also
cut your current income tax bill. Some planning possibilities:
tax law allows you to give away $10,000 per year per recipient. 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 up to $20,000
per 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 once-in-a-lifetime exclusion.
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.
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.
proper planning, certain life insurance proceeds can be kept out of
much do you need for retirement? What property, if any, should one
consider parting with during his or her lifetime? Estate and gift
planning is a very personal process. Each family plan is unique. Effective
planning should involve you, your accountant, your attorney, and in many
cases, an insurance agent and trust officer.
us! Please call us for an initial conference at no charge. We will
help you assess your need for estate and gift planning. If your financial
affairs are simple, the meeting will be short. If you have more complicated
matters, the meeting will be longer, but the time will be well spent.