Inheritance Planning: Make A Difference While You’re Alive

When you inventory your assets as you are planning your estate it can be a satisfying feeling to recognize the fact that you are in a position to do a great deal for your loved ones. That’s the good news. The bad news is that you won’t be around to see them enjoy their inheritances. Another concern that you may have involves the risk that you take when you give a younger family member a large inheritance. He or she may never go through with obtaining a comprehensive educational underpinning and as a result never realize the full potential that lies within.

If you are indeed in a position to provide your family members with inheritances that are significant enough to change their lives you are probably going to be exposed to the estate tax. A good way to gain estate tax efficiency while guiding your loved ones toward a path of personal success is through the practice of educational gift giving.

Many people are not aware of the fact that you can pay for the school tuition of an unlimited number of students equaling any sum of money without incurring any gift tax liability. It should be mentioned that this is a “stand-alone” exemption and it does not impact the unified lifetime gift/estate tax exclusion. By giving these gifts you are providing your loved ones with a chance to help themselves and gain the educational foundation that they need to make a difference in the world. At the same time you are reducing the value of your estate for estate tax purposes.

It should be stated that the educational exemption does not include living expenses, books, and fees. But, you are also entitled to a $13,000 per person gift tax exemption that is not applied to your lifetime exclusion. This can go a long way toward covering these expenses. Plus, if you are married your spouse is also entitled to the same exemption so you could give as much is $26,000 per student per year free of the gift tax in addition to picking up tuition costs.

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Alan Augulis, Estate Planning Attorney

Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

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