We Care

Taking advantage of gifting options

As we have previously written about on this blog, 2012 is a year of great opportunities for estate planners and their clients.

In addition to historically high estate and gift tax exemption amounts, interest rates are historically low and there real estate is widely undervalued. All these factors together constitute a very favorable climate for getting one’s estate in order.

In terms of gifting, now is a great time to think about how it may fit into one’s estate. Current tax law allows each person to make an annual tax-free gift of $13,000 per person, per recipient, and to pay an unlimited amount of medical and education expenses for another, provided the money is given directly to the institution providing the services.

This annual amount is on top of the $5,120,000 combined lifetime estate and gift tax exemption amount. In 2013, as our readers know, this exemption amount is set to go back to $1 million, if Congress takes no action.

Because of the opportunities for tax-free gifting, our readers really ought to see how lifetime gifting may fit into their estate plan. Lifetime gifting is a great way to get assets out of your estate and minimize estate taxes. There are also multiple options for maintaining a degree of control over gifted assets by means of trusts, LLCs, and other means.

In coming articles, we’ll be looking at other ways to take advantage of the favorable estate planning climate. In gifting, as in each of the other areas we’ll discuss, it is important to realize that any estate planning technique you choose to implement should serve you and your family’s unique goals.

Source: Forbes, “Tax Free Gifting During 2012-A Great Deal!,” Rob Clarfeld, February 14, 2012.

Archives