Get documents about "Estate And Gift Taxes Are Unified
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When you are engaged in the process of estate planning one of the primary objectives is going to be to do what is necessary to prevent asset erosion
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Estate And Gift Taxes Are Unified When you are engaged in the process of estate planning one of the primary objectives is going to be to do what is necessary to prevent asset erosion. The biggest obstacle standing between your loved ones and their inheritances is the estate tax. As the laws stand on this day the estate tax rate is 35% and the exclusion is $5 million. However, when the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 sunsets at the end of 2012 the rate goes up to 55% and the exclusion is set to be reduced to just $1 million. You could hear the above and immediately think, well, I will just give my family all or some of their inheritances before I die as a gift. The problem with that strategy is that there is a gift tax in place, and it is unified with the estate tax. There is however a $5 million lifetime gift tax exemption. There can be some confusion regarding the gift tax exemption that we would like to clear up. Since the estate and the gift tax are unified under Internal Revenue Service regulations, you can give gifts totaling as much as $5 million during your life free of the gift tax by using your lifetime exemption. But, if you were to do so, the entirety of your estate would be subject to the estate tax because the single unified $5 million exemption covers both gifts and your legacy. It should be noted that there are some additional gift tax exemptions that can be utilized that do not impact your lifetime unified exemption. You may give gifts of as much as $13,000 every year to an unlimited number of recipients free of the tax. And, you can pay the medical expenses and the school tuition of any number of people equaling any sum of money as a tax-free gift. Experienced estate planning attorneys Indianapolis IN of the Frank & Kraft Attorneys at Law offers estate planning and business planning resources to residents of Indianapolis IN. To learn more about these free resources, please visit http://www.frankkraft.com today.
