New Tax Law Highlights

12:30 pm Uncategorized

Congress looked an awful lot like Santa this year in passing new tax legislation for the next two years.  Here’s what was in the stocking:

A $5 million exemption amount for individuals – which means that a single person can pass on up to $5 million at their death without any federal estate tax.  A married couple can pass on up to $10 million, with proper estate planning.

The amount a person can gift during their lifetime is now $5 million for 2011 and 2012, up significantly from the 2010 $1 million gift amount.  For 2011, considerable assets can be transferred without any gift tax.  For those with lots more to give, assets over $5 million can be transferred with only a 35 percent gift tax.

The GST (generation-skipping tax) exemption is $5 million. Using advanced estate planning tools, there is an opportunity to provide significant estate tax savings for future generations.

What about the estates of those who died in 2010?   Those estates have a choice:  they may elect either the $5 million exemption amount, or benefit from no estate tax (likely the best choice for the billionaires who passed this year), but also no step-up in basis for assets exceeding $1.3 million to heirs (and $3 million to a surviving spouse).

To learn more about how your estate can benefit from the new tax legislation, contact our California estate planning law firm.

Contact us today for individualized planning strategies to meet your unique needs.

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