It’s official — for 2016, the estate and gift tax exemption is $5.45 million per individual, up from $5.43 million in 2015.
That means an individual can leave $5.45 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield $10.9 million from federal estate and gift taxes.
The annual gift exclusion remains the same at $14,000.
For more information about estate planning, please contact our Estate Planning Attorney in Woodland Hills today: (818) 501-5800
As many estate planners anticipated, The Internal Revenue Service has raised the limit on tax-free transfers during life or at death. Beginning in 2015 that amount, known as the basic exclusion, will increase to $5.43 million per person, up from $5.34 million this year. This announcement, in Revenue Procedure 2014-61, indicates there will be no change in the annual exclusion, allowing you to give $14,000 in cash or other assets each year to as many individuals as you want without using the basic exclusion. The annual exclusion gifts don’t count towards the lifetime gift exemption. Another tactic is to fund a Continue reading
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Continuing on our estate tax discussion from last month, there are a number of other reasons, besides minimizing estate tax, to consider whether to engage the services of an estate planning attorney:
So the next time the question of an estate plan comes up and you think to yourself, I have “nothing”, I do not need a plan, do yourself a favor and reconsider.
Source: IRS, Statistics of Income, August 2013
The IRS recently released a statistical report entitled “Estate Tax Returns filed for Wealthy Decedents, 2003-2012”. Some of the more interesting statistics in the data collected were:
Does the significant decline in the number of estate tax returns (due to the threshold for such returns increasing to $5.12 million in 2012 from $1 million) mean that only the “wealthy” (i.e. those with estates in excess of $5.12 million based on the 2012 threshold), need to be concerned about an estate plan and the avoidance or minimization of estate taxes? Absolutely not.
While the avoidance and/or minimization of estate taxes is certainly one good reason to engage the services of an estate planning attorney, there are a number of other reasons to consider which will be discussed in part 2 of this blog series.
A revocable living trust allows couples to effectively double the estate tax exemption (currently $5,000,000). If you only had a will, as opposed to a trust, which left everything to your surviving spouse, you would lose your exemption.
The trust lets you keep your exemption, which could potentially save over $1,000,000 in taxes.
For specific questions about setting up a living trust and estate taxes, please contact our Estate Planning Attorney in Los Angeles today at (818) 501-5800.
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