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Showing 8 posts tagged estate tax.
Exemption Portability - What is it, and how does it work?
The term "portability" is used in many contexts, but in the estate planning context portability describes the way a surviving spouse can use the remainder of a deceased spouse's unused exclusion amount to further shield her or his estate from tax liability. Portability first came about in 2010 as a temporary concept in the Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010. It was set to expire on December 31, 2012, but Congress, in the American Taxpayer Relief Act of 2012, made portability a permanent part of the estate and gift tax exclusion. The current unified exemption for estate and gift taxes is $5.43 million (for the year 2015), so portability allows for a potentially very large tax break for a surviving spouse's estate. More >
Nothing is uncertain like death taxes
There's a saying about death and taxes, the certainty thereof, which has been oft repeated to the point of weariness. While it is true that the imposition of taxes is a certainty, the shape and form of such taxes, especially in an estate planning context, is anything but. Just when one believes the ground to be firm in any particular tax context, the sands begin shifting. The federal estate tax has been just such an example the past several years, and estate plans should account for future uncertainty. More >
Is it time to revisit one's estate plan?
It can be hard enough to realize the value of an estate plan. Those who realize such value can still fall into the trap of believing that such a plan is a "one and done" proposition, a set of documents that only needs to be executed once and requires no maintenance. Unfortunately, nothing could be further from the truth. Estate plans should evolve, and just as one's financial situation and family members may change, so should the corresponding estate planning documents. Luckily, there are certain milestones that can hint that an estate plan should be given a tune-up, and these life markers are easy to spot. More >
When Making a Large Gift, Don't Forget About the Gift Tax
Gift tax is not something many people think about, and for good reason: it will not affect the majority of taxpayers in any appreciable way. However, it can make a significant difference to wealthy givers who make large gifts in an effort to pare down an estate, and while the exemption is high, it is not limitless. As with most things, it is better to understand the rules and not need to use them than to wind up affected by them when you did not understand them. More >
Be Wary of Estate Tax Provisions in the Proposed Fiscal Year 2016 Budget
It's time to call your estate and financial planners - new tax provisions in the proposed FY 2016 budget once again show the specter of potentially brutal taxes at death for the moderately wealthy. While these taxes exist only in the proposal stage for now and have to pass through the gauntlet of an opposition Congress, it's never too early to take a look at your estate and plan ahead. More >
Many Taxpayers Worry About the Estate Tax, But Few Plan Accordingly
Estate taxes often garner a lot of attention - particularly in an election year when the threat of raising taxes routinely becomes a political focal point. The estate tax, 40% at the federal level,[1] aptly referred to as the "death tax," does have the potential to be quite devastating. However, it is important to put the estate tax in the proper context. Instead of worrying about how much the Government will take from taxpayers' estates when they die, taxpayers should focus on what they can do now to protect their assets. More >
A Hollywood Lesson for Everyday People: Trusts
Phillip Seymour Hoffman, an accomplished actor, died suddenly in February at age 46 of a suspected drug overdose. Seymour had a long-term companion, Marianne O'Donnell, with whom he had three young children. Under the terms of his Will, a significant chunk of his $35 million-plus estate was left to O'Donnell. The media and estate planners have examined the Will, which has led to several estate planning issues garnering public attention. His Will was written before the birth of his last two children and never updated; thus, his estate plan is completely silent about his wishes for them. The actor's death also highlights the effect that marriage can have on an estate plan. Because Hoffman and O'Donnell were not married, nearly $14 million must be paid in estate taxes - an outcome that could have been avoided had the couple tied the knot (at the federal level, any property passing to a spouse at death is free of estate taxes, therefore delaying any federal estate tax until the surviving spouse's death). More >
President Obama's 2015 Budget Proposals for Estate & Gift Tax
On March 4, the President unveiled his fiscal year 2015 budget proposals, totaling $3.9 trillion. The overall emphasis in his proposal was creating incentives for lower and middle income individuals while curing tax preferences for higher income individuals and businesses. Not new to the proposal was the President's plan to lower the estate, generation-skipping transfer ("GST") and gift tax exemptions to their 2009 levels starting in 2018. More >
