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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 money.

Effective January 1, 2018 the estate tax exemption increased to $11,180,000 and will increase annually based on a cost of living adjustment. It is set to revert to $5,000,000 on January 1, 2026. So there is a short period of time to take advantage of this increased exemption by making gifts outright or in trust for your beneficiaries.

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 tax bill.

Even if your estate is under the exemption amount you may want to consider leaving your assets in trust for your beneficiaries to create divorce and creditor protection or provide special benefits to a disabled child, etc. There are many planning opportunites with the use of trusts.

Some planning possibilities:

Current tax law allows you to give away $15,000 per year per recipient. (This amount is adjusted annually for inflation.) 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 $30,000 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 estate tax exclusion.
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 generally make unlimited transfers to your spouse either during your lifetime or through your estate. There are generally 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 estate.

For assistance with your estate planning, contact us.

Traylor, Gratton & Beaumont, LLC
1260 S. Federal Highway, Suite 101 Boynton Beach, FL 33435
(561) 737-7900
Fax: (561) 737-7924
E-mail: tgbk@tgbk.com

About Us | Services We Provide | Tax Preparation | Financial Planning
Estate & Gift Planning | Investment Review | Financial Statements | Weekly Tax Tips | Tax Videos
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