Estate planning typically requires a consideration of a number of factors that will ultimately impact the plan, including the tax implications of a proposed estate plan. Federal gift and estate taxes, for example, can diminish the value of an estate considerably if tax avoidance strategies were not incorporated into the individual’s estate plan. What is the marital deduction though? Can that resolve the tax issue? Although the marital deduction does dodge the gift and estate tax bullet, it only … [Read more...] about What Is the Marital Deduction?
Although the primary goal of your estate plan will likely be to provide a roadmap for the division of your estate assets upon your death, you will likely choose to include additional goals in your estate plan as well, such as tax avoidance. If you are fortunate enough to have built up a modest to large estate you must be mindful of federal gift and estate taxes when creating your estate plan. Numerous estate planning tools and strategies may be used to help minimize, or even avoid altogether, … [Read more...] about What Is the Annual Gift Tax Exclusion?
The big financial news that was on everyone's mind at the end of the year involved the possibility of the United States going over what was being called the "fiscal cliff." If the powers that be did not come up with some type of new legislation certain tax increases and spending cuts would have been implemented. One of these tax increases would have been applied to the federal estate tax. The maximum rate of the tax was scheduled to rise from 35% to 55%, and the exclusion would have gone down … [Read more...] about Budget Compromise Changes Estate Tax Rate
There is an old Kenny Rogers song that gives out some free advice: "Don't ever count your money, when you're sittin' at the table." This strategy may be good for gamblers, but it is something to avoid when it comes to estate planning. The estate tax can do a lot of damage to your financial legacy. Not everyone is exposed to the tax, but if you are you must work with an experienced estate planning attorney to take steps that provide estate tax efficiency. How is tax responsibility evaluated? … [Read more...] about Net Worth Statement Invaluable When Calculating Estate Tax Exposure
There is an estate tax on the federal level that is poised to consume a significant portion of your legacy if you do not take preventative actions, but there are some exemptions. This year the first $5.12 million that you pass along is exempt. However, next year this figure goes down to $1 million. A common tax exemption question arises about bequests that you leave to your spouse. If you bequeath resources to your husband or wife will these assets be subject to the federal estate tax? The … [Read more...] about Is Inheritance Received From Spouse Taxable?
Anyone who takes financial planning seriously knows that you must adjust to ever-changing market conditions. This adaptivity is something to apply to estate planning as well. If you go forward feeling as though you have everything in place because you executed an estate plan in the past without paying attention to relevant changes that come down the pike you could be taking some big risks. One of the things that should set off the alarm that motivates you to make an appointment to speak with … [Read more...] about Estate Planning: Be Alert as Circumstances Change
While most people are aware of the fact that there is a Federal estate tax in place you may not know about the gift tax. Yes, there is a federal levy that is imposed on asset transfers of a significant nature while you are still alive. There is an annual exemption of $13,000 per gift recipient. Any gifts that you give exceeding this amount of money to one person during a particular year become taxable. It is possible to utilize a portion of your unified gift/estate tax exemption when you are … [Read more...] about Must You Include Gifts When Filing Income Tax Return?
If you want to transfer assets to your loved ones while you are still alive these transfers are potentially subject to the federal gift tax. This tax is unified with the estate tax and there is a $5.12 million unified exclusion at the time of this writing in 2012. (It is scheduled to be reduced to $1 million in 2013.) What this means is that gifts that you give during your life using this exclusion will reduce the exclusion amount that is left when your estate is being transferred to your … [Read more...] about Gift Tax Not Imposed in Some Instances
Retirement planning is integral for serious minded individuals who want to be able to enjoy a certain modicum of financial security during their senior years. Putting yourself in a position to be able to pay your way for perhaps a couple of decades or more without working can require some long-term financial discipline as you act within an intelligently conceived framework over an extended period of time. In order to be able to reach your objectives you must accurately project your future … [Read more...] about Paying Property Taxes Can Be Challenging for Some Seniors
There are those who go forward unconcerned about the estate tax because they have heard that it is something that only applies to the very wealthy. Just how true this is will depend on your definition of "very wealthy." In fact, when 2013 arrives you really don't have to be a powerful tycoon to find yourself in possession of resources that exceed the estate tax exclusion amount, especially if you include the value of your home. Next year the estate tax exclusion is going down to just $1 … [Read more...] about Remember Home Value When Evaluating Estate Tax Exposure