The so-called "fiscal cliff" included changes to the estate tax that would have been devastating for many. If no deal was made to avoid falling over the cliff in 2013 the estate tax exclusion would have been reduced to just $1 million. The maximum rate of the tax would have gone up from the 35% that was in place in 2012 to a staggering 55%. After the crisis was averted via an 11th hour compromise we were spared the above fate. Going forward in 2013 we have much of the same with a slight … [Read more...] about Fiscal Cliff Compromise Provides Estate Tax Clarity
Taxes
New Year’s Resolution: Talk to an Estate Planning Lawyer
Each year many of us make resolutions that we intend to make good on once the holiday season has come and gone. This year we would like to urge everyone to consider the importance of estate planning. The statisticians tell us that the majority of people are going through life without a solidly constructed estate plan. If you are among them you are quite frankly doing your family a disservice. We never can predict the future, and even if you are a relatively young adult you should execute the … [Read more...] about New Year’s Resolution: Talk to an Estate Planning Lawyer
When Is $471 Million Not Enough?
A lot of people would say that you have paid more than your share of estate taxes if you wind up parting with $471 million or so. The case of the estate of the deceased art collector Ileana Sonnabend demonstrates that this amount may not be enough for the Internal Revenue Service. It all revolved around a work of art, a sculptural combine called "Canyon" that is the creation of Robert Rauschenberg. This work would be very valuable on the open market if it wasn't for the fact that it can never … [Read more...] about When Is $471 Million Not Enough?
Gift Tax Exclusion Plummets in 2013
We would like to pass along a reminder about the pending changes to the unified gift/estate tax parameters. A very limited window of opportunity still remains and it is something that you should be aware of if you are serious about wealth preservation. Nonexempt gifts that you give while you are still alive that exceed the lifetime exclusion amount are taxable. This exclusion sits at $5.12 million for the rest of 2012, but it is going down to $1 million next year. Simply put, you could divest … [Read more...] about Gift Tax Exclusion Plummets in 2013
A Look at Spousal Estate Tax Exemption
We would like to provide some clarity with regard to the spousal estate tax exemption at the federal level. If you are married you may leave any amount of money to your spouse without incurring any federal estate tax liability. However, this exemption should not be viewed as an estate planning cure-all. Invariably your husband or wife is going to want to leave the assets that he or she inherited from you to loved ones. At this point the estate tax will in fact be looming because the exemption … [Read more...] about A Look at Spousal Estate Tax Exemption
A Look at Cash Gifts From a Tax Perspective
Estate planning attorneys are often asked questions about how gifts are taxed. We would like to take a brief look at the subject here. When it comes to gifting there is a giver and a receiver. Someone who receives a cash gift does not have to pay income tax on these incoming funds. There is however a caveat. For example, if you were to receive a certificate of deposit as a gift there would be appreciation over time. Any earnings that are accumulated above and beyond the initial amount of the … [Read more...] about A Look at Cash Gifts From a Tax Perspective
Don’t Overlook Death Taxes on the State Level
Taxation is a threat to the wealth that you have been able to accumulate throughout your life. There are some significant taxes that are levied on asset transfers and you must be aware of them and take the appropriate action to mitigate your exposure. First of all there is the federal estate tax that is applicable in all 50 states. The maximum rate of this tax in 2012 is 35% and the exclusion is $5.12 million. When you read the above you may come away thinking that you have no concerns because … [Read more...] about Don’t Overlook Death Taxes on the State Level
Property Taxes: Stay Current to Avoid Tax Liens
Living in the state of New Jersey has many advantages as we all know. However, we are subject to some rather hefty taxation and this is something to keep in mind when you are engaged in your retirement planning efforts. If you are living on a fixed income during retirement it can be challenging to be able to keep up with property tax increases. So when you are making your calculations you should definitely keep the possibility of ever rising taxes in mind. There can be a tax lien placed on … [Read more...] about Property Taxes: Stay Current to Avoid Tax Liens
As New Year Approaches QPRT May Provide Solution
At the beginning of next year the estate tax exclusion is being reduced from $5.12 million to just $1 million. At that time the maximum rate of the tax is going to change as well under currently existing laws. Right now we're looking at a 35% top rate; in 2013 it goes up to 55%. When you are calculating your total assets in an effort to assess whether or not you are in taxable territory you must include the value of your home. Using 2009 figures the median cost of a freestanding residence in … [Read more...] about As New Year Approaches QPRT May Provide Solution
Indirect Giving Can Provide Tax Savings
It is sometimes said that no good deed goes unpunished and this would seem to apply to gift giving in the United States. We have a federal gift tax that is unified with the estate tax. So, any gifts that you give that exceed the lifetime exclusion that is afforded to you are taxable at a rate of 35% in 2012. If this was not enough, next year the rate goes up to 55%. If your resources do exceed the exclusion amount you may want to look for ways to transfer assets to people who would someday be … [Read more...] about Indirect Giving Can Provide Tax Savings
