Now or Later: When Is The Best Time to Transfer Wealth?

2:56 pm Uncategorized

money gift 2 e1298325291434 Now or Later: When Is The Best Time to Transfer Wealth?A recent New York Times article points out that with the passage of the new tax laws late last year that lifted the lifetime gift tax exemption from $1 million to $5 million, many may want to reassess how and when they transfer wealth.

Prior to this year, when the gift tax exemption was much lower than the estate tax exemption, it was more advantageous to gift assets after death. Now, with both estate and gift tax exemptions at $5 million per individual and $10 million for a married couple, it becomes more of a personal decision as to whether to gift now or after you’re gone.

According to the article, some of the advantages of giving gifts while you are living include:

  • You can reap the appreciation of your beneficiaries and see how they are using your gift;
  • If Congress decides to decrease the gift tax exemption in 2013 — and elects not to grandfather 2011 and 2012 gifts – the gifts given now would still eliminate future appreciation of those gifts from your estate.
  • Those in professions with a high risk for malpractice claims can move up to $5 million into trust to protect assets.
  • Same-sex and other unmarried couples can shift assets without incurring taxes.

With the rise in exemption rates, if your trust documents include a “formula clause” rather than stating a specific amount, you should review them with your California estate planning attorney to be sure you don’t inadvertently disinherit a loved one.

Your California legal and financial planning experts are at your service; Contact us today.


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