VIEWS: 22 PAGES: 1 CATEGORY: Legal POSTED ON: 10/11/2012
To be able to proceed intelligently when you are planning your estate you must have an understanding of the relevant tax laws
Unification of Gift & Estate Tax To be able to proceed intelligently when you are planning your estate you must have an understanding of the relevant tax laws. There are those who think that it is not fair, but acts of giving while you are alive or after you pass away are taxable. The gift tax is said to be "unified" with the federal estate tax. As a result, they both carry a 35% maximum rate as of this writing; however, this rate is scheduled to rise to 55% in 2013. Why don't you have to pay the gift tax every time you give someone a birthday present or Christmas gift? This is because there is a lifetime unified exclusion. It currently sits at $5.12 million but it is going down to $1 million next year. To provide an example, let's say that you gave $100,000 to each of your three children next year using the lifetime unified exemption. Since it will stand at just $1 million next year, only the first $700,000 of your estate would subsequently be able to pass to your heirs before the estate tax kicks in. It should be noted that there are some gift tax exemptions other than the lifetime exclusion. You can give as much as $13,000 to any number of people each year without incurring any gift tax liability, and this does not impact your available lifetime unified exclusion. This is a brief look at these two federal levies. If you would like to learn more and perhaps explore strategies that can be employed to gain estate tax efficiency don't hesitate to arrange for a consultation with a licensed and experienced Cleveland OH estate planning lawyer. Experienced estate planning attorneys Cleveland OH of The O'Brien Law Firm LLC offers estate planning and business planning resources to residents of Cleveland OH. To learn more about these free resources, please visit www.obrienlaw.net/ today.
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