There is a Federal gift tax in place that is designed to prevent people from giving away their resources while they are still alive in an effort to circumvent the estate tax. It carries the same rate as the estate tax which is 35% as of this writing.
These two levies are said to be “unified,” so the exclusion that exists encompasses both your estate and any gifts that you give that are not exempt for one reason or another. Under current laws the unified exclusion is $5.12 million, but things are scheduled to change at the end of this year when the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 expires.
In 2013, the combined exclusion is going to be just $1 million assuming there are no last-minute changes to the existing schedule.
So, when you think this through you see that you have a limited window during which you could give gifts to your loved ones who would otherwise be inheriting them while the exclusion is still $5.12 million.
Ideally you may want to wait if you knew the estate tax exclusion would remain at or above $5 million, but in light of the pending change you may want to give the matter some long hard thought.
The best way to proceed is to sit down and discuss your unique situation with an expert. Should you be interested in doing so, simply take a moment to pick up the phone to arrange for a consultation with a seasoned and savvy Indianapolis estate planning lawyer.
- What You Need to Know About Older Drivers in Indiana - November 30, 2023
- What Is Undue Influence in an Indiana Will Contest? - November 28, 2023
- How to Make Things Easier for Your Children After Your Death - November 23, 2023