With the estate tax exemption amount at $5,120,000 per person for the rest of 2012, there has never been a greater opportunity to transfer wealth free of estate tax and gift tax. In a little over two months, unless Congress takes action (which in an election year is very unlikely), the estate tax exemption amount will drop to $1,000,000 per person with a top tax rate of 55%.
If your estate exceeds $1,000,000, you may want to seriously consider taking advantage of an opportunity this year to gift a portion of your estate to your kids or grandkids. This not only allows you to get the amount you gifted out of your estate so that it is not subject to estate taxes at a potential 55% tax rate, but it also gets all the future anticipated growth out of your estate. A further benefit is that you can provide protection against creditors, ex-spouses and spend-down for long-term care on the portion that you gift.
We may never see another opportunity like this again- transferring this much wealth from one generation to the next without incurring any adverse tax consequences. The only downside is that we only have a short window left to do this. Time runs out at midnight on December 31st of this year, the moment by which the gift must be completed in order to take advantage of this legacy wealth preservation planning.
The gifting process takes some time, so if you would benefit from this strategy, you must start now to meet the deadline.
Putting something like this off can end up costing you millions of dollars. If you are looking to preserve as much of your wealth as you can from the federal government’ estate and gift taxes, there has never been a better opportunity to do so. If you would like to learn more about this legacy wealth preservation strategy to minimize taxes, call our office to schedule a free meeting with one of our estate planning attorney’s.
Contributed by MH Arrowhead, Prescott and Flagstaff Estate Planning Attorney David Eastman
Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MH. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.