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:
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Gifting
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. |
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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. |
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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