When you create an estate plan, that plan should accomplish several interrelated goals. One of those goals should focus on tax avoidance. After all, no one wants to lose a significant portion of their estate to Uncle Sam. One common mistake you should avoid, however, is to rely too heavily on the marital deduction. With that in mind, a Long Island estate planning attorney at Eghrari Law Firm explains why you should not depend on the marital deduction alone to protect your estate from …
What is the Gift Tax Lifetime Exclusion?
If you are planning to give away any money or any property, it is helpful to know the gift tax lifetime exclusion. Understanding the rules for gift taxes can be complicated, but you need to know how both state laws and federal laws work to tax transfers of your assets. You do not want to make an inter vivos gift during your life, or a post humous gift after your death, only to find that a substantial tax bill dramatically reduces the value of the gift that you have provided. Eghrari Law Firm …
What is the Annual Gift Tax Limit?
It is important to know the gift tax limit when you are planning on providing gifts to your friends or family. When you make a gift, it is possible that this could trigger a tax. You need to know when and how you are taxed, and by whom, if you are planning on giving away money and property. Giving strategic gifts during your lifetime could be an important part of your estate plan. It is also a nice thing to do if you have children or other friends or family members who you care about and …
What Is a QDOT Trust?
In the field of estate planning the acronym QDOT stands for a qualified domestic trust. To understand the value of a qualified domestic trust, you must know a few things about the federal estate tax. Estate Tax Parameters The federal estate tax credit or exclusion is $5.34 million in 2014. This is the amount that can be transferred free of taxation. If you are leaving behind more than $5.34 million, the estate tax is potentially applicable. The tax carries a maximum rate of 40 percent. There …
Do I Pay Taxes When Someone Leaves Me Money?
People invariably have questions when they hear about taxes on inheritances, and this is understandable. In this post we would like to look at transfer taxes and provide some useful background information. Income Tax In general, if you receive an inheritance you are not required to report the bequest as income on your income tax return. However, the situation becomes more complicated if you inherit appreciable assets. This is a matter that you should discuss with a tax lawyer or estate …
Secretariat & Estate Planning
Many people here in the state of New York and around the world remember the great racehorse Secretariat pulling away to win the Belmont Stakes by an incredible 31 lengths in 1973. This made him the ninth Triple Crown winner of all time, and it was the first time that a horse had captured the Kentucky Derby, the Preakness, and the Belmont in 25 years. If you're not a fan of sports or if this was well before your time you may have heard the story of Secretariat through the major motion …
What Is the Annual Gift Tax Exclusion?
There is a gift tax that is applicable when you give gifts to others. However, there is an annual gift tax exclusion, and there is a unified lifetime exclusion. Let's look at these exclusions and what they mean to you when you are planning your estate as a high net worth individual. Annual Gift Tax Exclusion Each year you can give gifts to others free of taxation as long as they do not exceed a certain amount per person. In 2014 this amount is $14,000. To be clear, this is not a total of …
Can I Give Tax-Free Gifts to My Children?
You may be surprised to hear that gifts to your children, or to just about anyone else for that matter, are potentially taxable. The reason why you do not hear from the Internal Revenue Service when you give your children birthday gifts is because there are credits or exclusions. Annual Gift Tax Exclusion We have an annual gift tax exclusion that allows you to give most gifts free of the gift tax. The amount of this exclusion in 2014 is $14,000. As a taxpayer you can give as much as $14,000 …
When Should I Use My Gift/Estate Tax Exclusion?
High net worth individuals must be concerned about taxes on large asset transfers. We have an estate tax in the United States, and there is also a gift tax. In the state of New York there is an estate tax on the state level as well, but we will discuss that in a different post. The gift tax and the estate tax are unified. The unified exclusion or credit is $5.25 million dollars. This is the amount of money that you can bequeath, or gift to others while you are alive, before these transfers …
Low Rates Make GRATs Attractive
The Section 7520 rate is low at the present time, and this makes the zeroed out GRAT strategy attractive to many people seeking avenues that provide tax efficiency. In the realm of estate planning a GRAT is a grantor retained annuity trust. You as the grantor name a beneficiary, and you receive annuity payments from the trust throughout its term. The IRS adds anticipated interest earnings to the trust's value using the Section 7520 rate. As this is being written (July of 2013) the Section …
529 College Plan Can Benefit Younger Heir
If you have a younger heir on your inheritance list that has not yet attended college you may want to consider starting a 529 college savings plan for the benefit of this individual. Anyone could consider doing this, but it has particular value for those who have assets that exceed the estate tax exclusion amount. At the present time the estate tax exclusion sits at $5.25 million. Anything above this is potentially subject to a federal estate tax that tops out at 40%. You could give gifts …
Do You Have Questions About Charities?
Charitable giving can be a meaningful part of your estate plan if you are in a position to spread some resources around among worthy causes. When you discuss the matter with your estate planning lawyer you will hear about various different devices that can be used to facilitate charitable giving. One of these would be a charitable remainder unitrust. With these trusts you receive income throughout the duration of the trust term, and at the conclusion of the term a charitable beneficiary that …
See Larger Map
Get Directions