There are taxes on asset transfers in the United States. One of them is the generation-skipping transfer tax. This tax could potentially be levied on asset transfers to relatives who are more than one generation younger than you. It can also be imposed on transfers to people who are not relatives who are at least 37.5 years younger than you are. This tax is applicable on direct transfers, but it can also be a factor when you are creating a trust for the benefit of someone who is more than one … [Read more...] about What Is the Generation-Skipping Transfer Tax?
Taxes
Will My Heirs Be Forced to Pay an Inheritance Tax?
There are taxes on asset transfers in the United States. There is an estate tax, and there is a gift tax. The gift tax is in place to prevent people from giving away their assets while they are living in an effort to avoid the estate tax. These two taxes are unified under the tax code. There is a $5.34 million unified lifetime exclusion or credit in 2014. This is the amount that you could transfer free of taxation. Because of this relatively large exclusion, most families will never pay the … [Read more...] about Will My Heirs Be Forced to Pay an Inheritance Tax?
Can I Give Tax-Free Gifts to My Children?
There is a federal gift tax in the United States, and it is unified with the federal estate tax. The maximum rate of the gift tax and the estate tax is 40 percent. Federal transfer taxes can be levied on gifts that you give to your children. Annual Gift Tax Exclusion Most people never pay the gift tax because there are exclusions. One gift tax exclusion is the $14,000 per year, per person annual exclusion. Each taxpayer can give up to $14,000 to any number of gift recipients within a calendar … [Read more...] about Can I Give Tax-Free Gifts to My Children?
What Is a Family Limited Partnership in Connecticut?
There are many different legal devices that are used in the field of estate planning. This is why you should discuss everything in detail with a licensed estate planning lawyer. You may be able to benefit from certain courses of action that you may not even be aware of as a layperson. One legal device that you could overlook is the family limited partnership. Many people who are looking for asset protection and transfer tax efficiency will create family limited partnerships. With a family … [Read more...] about What Is a Family Limited Partnership in Connecticut?
Consider a 529 Plan
Estate planning can involve many layers of consideration. This is especially true if you have been particularly successful throughout your life. There is a federal estate tax in place that carries a maximum rate of 40%. The estate tax exclusion amount was set at $5 million in 2011 with ongoing adjustments for inflation. Because of these adjustments the exclusion in 2013 was $5.25 million. It should be noted that we also have an estate tax on the state level in the state of Connecticut, and the … [Read more...] about Consider a 529 Plan
A Look at Intentionally Defective Trusts
The federal estate tax looms large for people who have been successful throughout their lives. At the current time the maximum rate of the estate tax is 40%, and the lifetime exclusion is $5.25 million. There are various different recommendations that astute estate planning lawyers can make for people who are faced with the prospect of paying the estate tax. Some types of trusts will provide tax advantages, and one of them is the intentionally defective trust. Of course the first thing that is … [Read more...] about A Look at Intentionally Defective Trusts
Don’t Forget IRS Form 709 to Account for Gifts
A lot of people are not aware of the fact that gifts that you give throughout your life are potentially taxable. We have a federal estate tax in place, and the gift tax prevents people from giving away their assets while they are still alive in an effort to avoid the estate tax. The two taxes are said to be "unified." As a result they both carry the same rate, which is 40% in 2013. The unified exclusion for 2013 was $5.25 million. This means that anything that you give away that exceeds this … [Read more...] about Don’t Forget IRS Form 709 to Account for Gifts
Value of Home Can Create Estate Tax Exposure
When you are planning your estate one of the first things to establish is whether or not you are going to be exposed to the estate tax. On the federal level the amount of the estate tax exclusion is $5.25 million in 2013. Anything that is deemed taxable that exceeds this amount is subject to a 40% estate levy. In Connecticut we have an estate tax on the state level as well, and the exemption amount for this tax is just $2 million. You have to understand the fact that the value of your home is … [Read more...] about Value of Home Can Create Estate Tax Exposure
Annual Gift Tax Exemption for 2013
You have to concern yourself with the potential ravages of the estate tax if you have enjoyed a particular amount of financial success throughout your life. Everyone in all 50 states has the federal estate tax to contend with, and it carries a 40% top rate in 2013. There is also the Connecticut state estate tax to consider, and in 2013 it is applied to the resources that you leave behind exceeding $2 million. It makes sense to consider giving gifts while you are still alive to people who would … [Read more...] about Annual Gift Tax Exemption for 2013
How Fiscal Cliff Deal Impacts Estate Tax
We would like to share the outcome of the fiscal cliff compromise as it applies to the estate tax here so that you can understand the playing field going forward in 2014. As it turns out the maximum rate of the estate tax went up, but the increase is not going to be as damaging as the 55% top rate that was looming. Going forward the maximum rate of the federal estate tax will be 40%. The basic exclusion amount will remain where it has been since 2011, and this figure is $5 million. However, … [Read more...] about How Fiscal Cliff Deal Impacts Estate Tax
