Some people think that the only reason that you would want to speak with an estate planning attorney would be to take steps to gain estate tax efficiency. They find out that the estate tax exclusion is a relatively high $5.34 million in 2014. Their assets don't exceed this amount, so they decide that they don't need to speak with an attorney. The truth is that the estate tax is only part of the equation. There are a number of other considerations, and it is certainly wise to go forward in an … [Read more...] about The Estate Tax Is Only Part of the Equation
Foreign Spouse Not Entitled to Unlimited Marital Estate Tax Deduction
We have an unlimited marital deduction in the United States that applies to the estate tax. If you are married, you can bequeath money to your spouse in any amount without incurring estate tax liability. Transfers to everyone else are potentially taxable at a maximum rate of 40%. We say "potentially" because there is a $5.34 million exclusion in 2014. Your assets must exceed this amount before the tax would kick in. The powers that be expect to be able to collect their taxes eventually because … [Read more...] about Foreign Spouse Not Entitled to Unlimited Marital Estate Tax Deduction
Gandolfini of Sopranos Fame had Flawed Estate Plan
People who are in possession of a great deal of wealth have a lot to lose via the imposition of estate taxes. There is a federal estate tax that is applicable to everyone in all of the states, and some states have a state-level estate tax. In California, there is currently no state estate tax, but the people in New York are not as fortunate. In the Empire State, there is an estate tax that tops out at 16%, and the exclusion is just $1 million. The federal estate tax carries a 40% top rate, and … [Read more...] about Gandolfini of Sopranos Fame had Flawed Estate Plan
Demystifying the ILIT
The acronyms that are used in the field of estate planning can sometimes leave the layperson scratching his or her head. Because of this, we often examine commonly used acronyms to take the mystery out of them. In this installment, we will highlight the irrevocable life insurance trust or ILIT. The estate tax on the federal level carries a 40% maximum rate, and the 2014 exclusion amount is $5.34 million. If you inventory your assets and find that your net worth exceeds this figure, you would do … [Read more...] about Demystifying the ILIT
Big Lottery Winners Face Estate Tax Exposure
A winning Powerball lottery ticket was recently purchased in the state of Florida, and the story provides some insight into the impact of the estate tax. Many of us have dreamed about winning a huge sum of money in a lottery of some kind. It can be quite a bit of fun to sit back and imagine everything you would do with the money. You may envision traveling around the world. One destination that you may not think about is a trip to an estate planning attorney's office. With the Powerball … [Read more...] about Big Lottery Winners Face Estate Tax Exposure
Funding 529 Plan Using Annual Exclusion
If you are in possession of assets that exceed the federal estate tax exclusion amount, you may want to take steps to intelligently reduce the taxable value of your estate. One way to accomplish this objective would be to somehow utilize resources while you are still alive for the benefit of those that are on your inheritance list. This is easier said than done because there is a gift tax in place. It is unified with the federal estate tax, and in 2014 there is a $5.34 million unified lifetime … [Read more...] about Funding 529 Plan Using Annual Exclusion
Charitable Giving: Know Where Your Money Is Going
There are various different ways to give to charity when you are planning your estate. The correct choice for you is something that you should probably discuss with an experienced estate planning lawyer. Some people would like to derive income as they set aside a certain amount of money for charities. This can sometimes be done with inherent tax advantages built-in. To this end, you may want to consider the creation of a charitable remainder unitrust. Another option would be to create a … [Read more...] about Charitable Giving: Know Where Your Money Is Going
How Long Will Your Financial Legacy Last?
A 2013 article published on the Wall Street Journal website sheds some light on the subject of lost inheritances. You may think that most people who can pass along enormous sums of money to the next generation are setting up their estates to provide for many generations to come. In fact, the statistics tell a decidedly different tale. Seven dollars out of every ten that is inherited is lost by the end of the second generation. Statistical averages indicate that only 10% of an inheritance is … [Read more...] about How Long Will Your Financial Legacy Last?
Steer Clear of These Common Estate Planning Errors
We would like to suggest that our readers steer clear of these three common estate planning errors. Error # 1: The assumption that you will never be exposed to the federal estate tax As 2013 approached, the future of the estate tax was hazy. Unless some type of legislation was passed in the 11th hour, the estate tax exclusion was going to be reduced to $1 million in 2013, and the rate was scheduled to rise to 55%. At the last minute, the American Taxpayer Relief Act of 2012 was passed … [Read more...] about Steer Clear of These Common Estate Planning Errors
Taxation Erodes Koch Estate
In the state of New York, the name Ed Koch is certainly a memorable one. The former three-term mayor of New York City died in February, and he left behind a sizable estate. As an individual who was never married, Koch had no children. According to Forbes, he left his sister and her husband $500,000, and his sister-in-law and each of her two children got $50,000. Koch's brother died back in 1955. He also provided a $100,000 bequest to his secretary. The bulk of his estate went to his sister's … [Read more...] about Taxation Erodes Koch Estate
