When you are interested in reducing the value of your estate in an effort to gain estate tax efficiency, you may want to consider the practice of tax-free gift giving. Of course, the tax man is well aware of the fact that people could choose to give their assets away to their heirs before they pass away in an effort to sidestep the estate tax. So there is a gift tax in place to close this potential loophole, and the rate of taxation mirrors that of the estate tax. There is a lifetime gift tax … [Read more...] about Intelligent Estate Planning, Gifts & Tax Efficiency
There was a great deal of uncertainty throughout the 2010 calendar year regarding the estate tax, and needless to say this made the job of estate planning attorneys rather challenging. The estate tax was repealed for the 2010 calendar year, but under existing laws it was scheduled to return in 2011. Its return was not especially welcome, but the details surrounding the tax were an additional source of concern. In 2009 when the tax was last in effect, the exclusion amount stood at $3.5 million … [Read more...] about Estate Tax Relief On Way
In 2010 we had a one year respite from the estate tax, and most people view any tax relief as a positive. However, there is an intrinsic inequity existent in a temporary repeal that makes a relative few immune to a tax the rest of us must address. A good case in point involves the former owner of the fabled New York Yankees, the mercurial George Steinbrenner who died in July of 2010. Forbes magazine estimated the overall worth of his estate at $1.1 billion. The estate tax exclusion amount in … [Read more...] about Estate Tax Return In The Offing
What if you bought a piece of property years ago for about $25,000 and now it is worth more than $300,000? You don't want it anymore but want to get rid of it in a way that maximizes your tax advantages. If you sold it outright, you might have to pay capital gains tax, and you don't want that. How about making a charitable remainder trust to your favorite cause? Knowing that both you and the charity will benefit makes it an especially attractive option. How it works: You must be able to … [Read more...] about Feeling Charitable? Give It Away and Come Out Ahead
If you have a large estate and want to start giving it away, but want to limit your tax liability, consider using the annual gift tax exclusion. What that means is that you can give up to $13,000 per person per calendar year and neither you nor the recipient has to pay taxes on it. So, you can give $13,000 per year to 10 people or 1,000 people and there will be no taxes. And you can do that year after year. (The amount of the exclusion is increased from time to time.) You and your spouse can … [Read more...] about Annual Gift Tax Exclusion: Tax Free Money Zone
When do you use a Q-Tip? We are not talking about the cotton swab but a Trust that can be used to accomplish your estate planning goals. You might want to consider establishing a Q-Tip, or Qualified Terminable Interest Trust, if you are: Concerned about your spouse remarrying and your money benefiting the new spouseWorried your spouse will not pass on your money to your childrenAfraid that creditors will attach your surviving spouse's propertyConcerned your spouse is unsophisticated about … [Read more...] about When to use a Q-Tip
George Steinbrenner, owner of the New York Yankees, really hit a ball out of the park. He died on July13, allowing his beneficiaries to win the estate tax lottery. That is because the estate tax expired in 2009, so no tax has been imposed on estates in 2010, including the more than $1.15 billion he left. But the tax will come back in some form in 2011, and at what percentage and exemption level is of extreme importance to estate planning lawyers and their clients. The House of … [Read more...] about Will Estate Tax Get Life Support?
When you fund property into a Revocable Living Trust, you transfer ownership of property from your name into the name of the trustee. Typically, you serve as the trustee while you’re alive, so that you control the property and retain all the benefits of property ownership. And because the trust is revocable, you can cancel the trust and transfer the property back into your individual name at any time. Under IRS rules, the only way you can avoid being taxed on the property in a trust is to … [Read more...] about How Does A Revocable Living Trust Affect Your Income Taxes?
With so much buzz about the estate tax returning in 2011, many people are taking a closer look at just what constitutes the value of their estate. Some items are obvious – your home for example, your cars and your personal belongings, but what about life insurance? Is that considered part of your estate as well? The answer is yes and no. If the life insurance policy is “owned” by you, then yes, the proceeds of the policy will be included in calculating the value of your estate. If … [Read more...] about Is a Life Insurance Policy Considered Part of My Estate?