If you have a moderate to large estate that you plan to pass down to loved ones, one of your primary estate planning concerns should be the federal (and in some cases state) gift and estate tax. If you fail to plan for the impact the tax could have on your estate, your loved ones could lose a significant portion of their inheritance to Uncle Sam. To help illustrate the importance of planning, the Bath estate planning attorneys at the Law Office of Michael Robinson, P.C. discuss how large of an … [Read more...] about How Large of an Estate Can Pass Tax Free?
Before we explain the annual gift tax exclusion, we should provide a bit of background information. The estate tax was established in 1916. At first, there was no gift tax. As a result, high net worth individuals gave gifts while they were living to avoid the estate tax. The tax man took notice, and a gift tax was enacted. It was briefly repealed, but it returned for good a couple of years later. These days, the gift tax is unified with the estate tax. Annual Gift Tax Exclusion Gifts … [Read more...] about What Is the Annual Gift Tax Exclusion?
There is a federal estate tax in the United States, but most people do not pay the tax because of the credit or exclusion. In 2014, the amount of the federal estate tax exclusion is $5.34 million. A tax relief act was passed back in 2010 that set the amount of the estate tax exclusion at $5 million for 2011. Since that time, the $5 million base exclusion has remained intact, but there have been ongoing adjustments to account for inflation. In 2015 another inflation adjustment may be … [Read more...] about How Much Can You Transfer Estate Tax Free?
Estate planning is often a very emotional, personal process that will affect you and your family for years to come. Part of this process involves looking at the important legal issues that will affect you and your family as you get older, as well as after you are dead. Yet the law is only one piece of this puzzle. Only you know what you want to leave behind, and many people who are creating an estate plan know that inheritances and property are only a minor piece of the picture. What’s most … [Read more...] about Protecting the Family Story
Even though you may have heard of trusts, you might not know a lot about these very important estate planning tools. When people first speak to an estate planning lawyer in New York, many of the questions they have involve trusts, what they do, and how they work. First, it’s important to realize that there are many kinds of trusts in Rochester NY. Depending on your situation and your needs, your estate plan might use one or more of them. So, how do you know if you need a trust? Your … [Read more...] about Trusts in Rochester NY: Should Your Estate Plan Include a Trust?
Creating and drafting an estate plan is not the easiest thing to do. There are, after all, a great number of things with which one must be concerned, and it’s quite easy to overlook some issues. Most often these issues are overlooked because they either do not address the tax code or they do address the tax code; either way, take a look at this list and see if you have overlooked some of these issues: The Estate Tax Don’t jump to the conclusion that your estate won’t qualify for the estate … [Read more...] about Have You Overlooked These Estate Planning Issues?
Even though the next big political conflict is probably just around the corner, Congress and the President managed to reach a deal over the fiscal cliff that has significant implications for anyone with an estate plan. Though you should speak to your attorney about the specific points of the deal and how they might affect you, here are some of the big highlights. Your children get $10.5 million tax-free. Under the terms of the agreement the estate and gift tax provisions imposed by the federal … [Read more...] about What The Fiscal Cliff Agreement Does to Your Estate Plan
Question 1: What is the GST? GST stands for generation-skipping tax, or sometimes as it is referred to, the generation-skipping transfer tax. It is a federally imposed tax that applies when people transfer wealth from one generation to another that is at least two generations removed. Essentially, this means it applies when grandparents give gifts to their grandchildren or great-grandchildren. Question 2: How does it work? The GST is similar to both the estate tax and the gift tax. When the … [Read more...] about 4 Questions About the GST
A durable power of attorney for finances lets you choose someone to take over your financial responsibilities when you become sick or otherwise unable to manage them. Your attorney can tell you what specific steps you need to take to create this important document, but you can get a head start on the process by reviewing our brief checklist. Preparation. Take some time to learn about powers of attorney and what they can do for you. Make a list of questions you have and ask your attorney for … [Read more...] about A Brief Checklist For Creating a Durable Power of Attorney For Finances
Estate taxes were big news in 2010 and the beginning of 2011, as Congress passed a two year "patch" that unified the federal estate, gift, and generation-skipping transfer tax, as well as increased the exemption to $5 million for 2011 and 2012. An important aspect of this tax act may be lost on those not familiar with estate planning terms, and wasn't as widely reported – that of portability. The new portability rules of the tax act allow spouses to "share" their estate tax exemptions with one … [Read more...] about Defining Portability in Estate Taxes