Assume Mrs. Smith dies 10 years after Mr. Smith and she still has portability. If invested wisely and not spent, her inheritance from her husband could double. If alternatively, Mr. Smith created an estate plan that caused a trust to be set up when Mr. Finally portability is set to expire in although it could be extended , so any estate planning we create for our clients needs to be flexible. Please note that the generation skipping exemption is not portable, so if that is an issue for planning, the credit shelter trust is the preferable vehicle.
The changes in the estate tax laws do not necessarily mean that trusts are not warranted in estate planning for our clients of any net worth. Finally, since Congress could decide to reduce the estate tax exemption in the future, even clients whose assets do not exceed the federal or state exemptions currently in effect may be well advised to have documents that contain credit shelter trusts that can be funded by having the spouse disclaim assets — just in case.
As noted above, until we have more certainty, flexibility is the key. These plans should be reviewed every few years by our clients because their lives change and these changes may have a greater impact on their planning than any tax law changes that come along.
Representative Kevin Brady introduced identical legislation in the House that same day. In very recent news, former President Bill Clinton and Speaker John Boehner have both advocated extending the current law for one year.
How to plan in this environment? This is particularly critical if you have assets such as a closely held business or other such assets susceptible to valuation discounts.
We do envision that valuation experts will be exceedingly busy and there will be a rush to make gifts at calendar year-end. We encourage you to beat the rush and contact your estate planning attorney now to begin the process and take advantage of this opportunity.
These materials provide general information which does not constitute legal or tax advice and should not be relied upon as such. Particular facts or future developments in the law may affect the topic s addressed within these materials.
Always consult with a lawyer about your particular circumstances before acting on any information presented in these materials because it may not be applicable to you or your situation.
The gift tax fell further, to 35 percent, in That means wealthy people, who might face the estate tax in 20 or 30 years, or more, can get vast assets -- and, more importantly, the appreciation on those assets -- out of their estates while they are alive. One: A wealthy person can now pass down millions of dollars before those assets have appreciated, one of the biggest goals of estate planning.
That gives a wealthy family even more opportunities for extremely long-term planning. You get a lot of leverage. Two: It lets you game the federal income-tax rates -- and may let you do the same thing with state tax rates. The new, looser, rules let you do just that. Similarly, the larger lifetime gift exclusion may let the wealthy arbitrage state tax rates with their children.
If that person can give some income-producing assets to their lower-tax-bracket kids in Nevada, where there is no income tax, they get a double benefit. Three: The new rules let wealthy families wrap up estate planning that was previously done with low-interest, intra-family loans at rates set by the Internal Revenue Service.
0コメント