New year to bring changes in estate and gift tax law, P.2

In our previous post, we mentioned that the ever changing gift and estate tax law is set to change again in a couple weeks. Now there is now only a tiny window of time to take advantage of the current very favorable conditions for passing on wealth. Once again, if Congress doesn't act in the next weeks, the combined estate and gift tax exemption is set to drop from over $5 million with a 35 percent tax on gifts and bequests exceeding that amount, to a $1 million exemption with a top tax rate of 55 percent.

Because of the favorable conditions for passing on wealth, taxpayers have an extra incentive, besides the usual holiday cheer, to be generous over the Christmas season. It is important to keep in mind though, that gifting should be done carefully whenever it is done, so that it fits within an overall smart estate plan.

Those considering last minute gifts should keep in mind that gifting while one is alive has a big disadvantage when the assets have appreciated in value. There is the capital gains tax to contend with. What happens is that the amount paid for the asset-its basis-will become the basis of the person receiving the gift, and the recipient will then have to pay capital gains tax on the appreciated amount when they go on to sell the asset.

Gifting can be a very important part of an overall estate plan. Lifetime giving is an important way of doing this. One can make use of the $13,000 annual gift tax exclusion, as well as the unlimited marital deduction, and education and medical deductions.

It is important to work with an experienced attorney when working gifting into one's estate planning. Doing so will ensure that the gifting component integrates well with the other aspects of the plan.

Source: Forbes, "Give Now Or Pay Later: Rich Face Dillema With Fate OF Estate And Gift Taxes Up In Air," Robertson Williams, December 17, 2012

No Comments

Leave a comment
Comment Information

Mr. Teiger, Thank you very much for your time and results. I will definitely recommend you & your firm to anyone who wants to be treated professionally courteously and needs results.Hope all is well.Again...thank you. Regards, Paul L.

msg iconEmail Us For a Response

When you have legal questions or concerns, contact our team at Teiger Law Center, P.C., by calling 678-374-7645, 800-780-2275 or reach us via email by completing our online contact form. From our Cumming and Alpharetta law offices, we represent clients in the Atlanta metro and throughout north Georgia.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Cumming Office
514 West Maple Street
Suite 101
Cumming, GA 30040

Toll Free: 866-726-2153
Phone: 678-374-7645
Fax: 770-406-8858
Cumming Law Office Map

Alpharetta Office
12600 Deerfield Parkway, Suite 100
Alpharetta, GA 30004

Toll Free: 800-780-2275
Phone: 678-374-7645
Fax: 770-406-8858
Map & Directions