Over recent weeks, we have been passing along various updated figures that are relevant from an estate planning and elder law perspective. In this post, we are going to answer a question that many people have about the annual gift tax exclusion. Before we focus on that particular subject, we will provide the appropriate background information, which will include a review of the 2021 estate tax parameters. Inflation Adjustment The federal estate tax exclusion is a set dollar amount that can … [Read more...] about Was There a 2021 Gift Tax Exclusion Increase?
Zappos online shoe store is one of the great business success stories of the Internet era. It all began in 1999 when an entrepreneur named Nick Swinmurn left a voicemail for Venture Frogs cofounder Tony Hsieh. Sminmurn was looking for start-up capital to launch an e-commerce website that would sell shoes, and Hsieh was not interested when he started listening. He was ready to move on to the next call when Swimmurn mentioned the fact that footwear was a $40 billion a year industry. The size … [Read more...] about Tony Hsieh of Zappos Fame Died Without a Will
Over the last couple of weeks we have been sharing information that has been made available about adjustments to relevant government program parameters. We have looked at the Social Security cost-of-living adjustment and the increases in the out-of-pocket Medicare costs. In this post, we will look at yet another relevant figure that has been released by the Internal Revenue Service. Federal Estate Tax Exclusion The estate tax exclusion is the amount that can be transferred before the estate … [Read more...] about IRS Releases 2021 Estate Tax Exclusion Adjustment
When you plan your estate, you make decisions about the inheritances that you will be leaving to your loved ones. At the same time, you have some control over the size of the pie that will be sliced up after your passing. There are some looming threats that can impact your legacy, and we will take a look at some of them in this post. Elder Financial Abuse It is a very sad phenomenon to say the least, but unfortunately, elder financial abuse is widespread. This subject started to draw … [Read more...] about Address These Sources of Inheritance Erosion
People often come away a bit confused when they hear bits and pieces about the taxes that can be applied on inheritances. The term “estate tax” is commonly utilized, and you may have also heard of an “inheritance tax.” Some people think that estate tax is a term that is used to describe the income taxes that you have to pay if you receive an inheritance. In fact, inheritances are not subject to regular income taxes. An estate tax is entirely different. Federal Estate Tax We do have a … [Read more...] about Estate Tax & Inheritance Tax: Is There a Difference?
There is an election looming over the horizon, and the outcome could have a significant impact on the federal estate tax parameters. High net worth individuals may be negatively impacted by a shift in the political mindset. Let’s look at the details. Federal Estate Tax Exclusion The majority of taxpayers do not have to worry about paying the federal estate tax, because you can transfer a certain amount before the tax would be levied. This threshold is called the estate tax credit or exclusion. … [Read more...] about Will Election Trigger Estate Tax Changes?
We always emphasize the importance of estate planning for all responsible adults. This being stated, before a landmark Supreme Court ruling was handed down in 2013, it was absolutely essential for committed LGBT couples. Prior to that time, same-sex marriages were recognized in some states, including New York. However, they were not recognized on the federal level because of a provision that was contained within the Defense of Marriage Act (DOMA). It defined marriage as a union that can only … [Read more...] about Edith Windsor Changed LGBT Estate Planning
If you have been very successful from a financial standpoint, you have to be concerned about the potential impact of estate taxes. Many people contend that the death tax is not fair, because your estate is comprised of resources that you have been able to retain after paying innumerable taxes throughout your life. Why should your death be a taxable event in and of itself? This a good question, but whether it is fair or not, the federal estate tax is a fact of life. The good news is that … [Read more...] about Estate Taxes Can Erode Your Legacy
The type of trust that is most commonly used is the revocable living trust. Many people are comforted by the idea that it is possible to change your mind and dissolve the trust at some point in the future. Plus, if you create this type of trust, you have control even while you are alive and well. As the grantor of the trust, you could serve as the trustee and the beneficiary at first. In the trust declaration, you would name successors to assume these roles after you are gone. You can change … [Read more...] about When Would You Use an Irrevocable Trust?
Overall, the tax laws that apply to inheritance distributions are favorable to American families. You are not required to report an inheritance as taxable income, and this would include life insurance proceeds. Plus, if you inherit assets that appreciated during the life of the decedent, you do not have to pay capital gains taxes on the appreciation. On the other side of the coin, if you have been very successful from a financial standpoint, you have to be concerned about a significant level of … [Read more...] about Estate Tax Exclusion Adjusted for Inflation