VIEWS: 8 PAGES: 1 CATEGORY: Legal POSTED ON: 10/4/2012
Success is the name of the game, but unfortunately the fruition of your financial goals can present some tax challenges
Help Relatives Now, Reduce Future Tax Burden Success is the name of the game, but unfortunately the fruition of your financial goals can present some tax challenges. If your assets exceed a certain amount after you pass away your heirs are potentially subject to the Federal estate tax. With the proper planning you can mitigate your exposure. The first thing you must do is determine if in fact your net worth (assets less liabilities) are in excess of the exclusion amount. This is an ongoing endeavor because the exclusion changes rather frequently. Right now in 2012 the first $5.12 million that you have can be passed to your heirs free of the tax. Next year this figure goes down to $1 million if the laws remain the same as they are right now. And, remember, life insurance death benefits on your life are included in the net worth calculation for estate tax purposes. One way to utilize resources for the benefit of people who would otherwise be receiving an inheritance from you would be to have a strategy for making lifetime gifts to them. While there is a gift tax in place there are certain exemptions. Let's say that you had a relative or friend who was in the unfortunate position of being inundated with a mountain of medical bills. This individual does not have health insurance and he or she would suffer financial devastation without assistance. You could pay these bills on behalf of the person in question as a gift without incurring any gift tax liability. And, you can actually acquire health insurance for this person and pay the premiums as a tax- free gift. There is no limit to the amount that you can pay on behalf of others free of taxation using this medical exemption. This exemption provides you with an opportunity to help people out in the present while you reduce the taxable value of your estate. To explore all of your tax-free gifting options, take action right now to set up an informative consultation with a good Oklahoma City estate planning lawyer. Experienced estate planning attorneys Oklahoma City OK of the Parman and Easterday offers estate planning and business planning resources to residents of Oklahoma City OK. To learn more about these free resources, please visit www.parmanlaw.com/ today.
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