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?
estate planning FAQs
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 … [Read more...] about Can I Give Tax-Free Gifts to My Children?
Probate is a factor when you are leaving behind final instructions in a last will. If you maintain direct personal possession of your property through to the time of your death, it will become probate property at first. It will not be distributed to the heirs that you name in the will until after the full probate process has run its course. There is a caveat to the above statement. There is a simplified probate process in the state of Connecticut. If the estate in question is valued at $40,000 … [Read more...] about Is Probate Always Required?
A power of attorney is a legally binding device that is used to appoint someone else to act on your behalf. When you grant a power of attorney you are called the principal or grantor. The individual that you choose to act on your behalf is called the agent or attorney-in-fact. When you create a power of attorney, it is typically going to go into effect right away unless you stipulate otherwise. Durable Power of Attorney In the field of estate planning, durable powers of attorney are utilized … [Read more...] about When Does a Power of Attorney Become Effective?
If you maintain personal possession of your property up until the time of your death and arrange for its transfer through the terms of a will, it will become probate property. The property is not distributed to the heirs that you name in your last will until the estate has been probated by the court. For some people an inheritance is an infusion of extra resources. There is no urgency with regard to the actual transfer of the assets. At the same time, if you have been given a bequest, you … [Read more...] about How Long Does the Probate Process Take?