As 2013 ends and 2014 begins, now is the perfect opportunity to review your existing Orange County estate plan and to consider any necessary modifications or updates. From a tax perspective, much has changed over the last 12 months. If your estate plan was created more than one year ago, it is important to have your plan reviewed to determine if these tax changes affect you. The following are five specific tax considerations that could influence your existing estate plan:

  1. The 2014 estate and gift tax exemption amount has increased from 5.25 Million in 2013 to 5.34 Million in 2014.
  2. The estate, gift, and generation-skipping transfer tax rate for transfers that exceed this exemption amount is 40%. This represents a substantial tax on your assets if proper Orange County estate planning updates are not made to your trusts.
  3. The annual gift-tax exclusion amount for gifts remains at $14,000—the same amount as it was in 2013. For individuals with taxable estates, it is important to take advantage of these tax-free transfers.
  4. In 2014, taxpayers can gift up to $145,000 to a non-citizen spouse without triggering a gift tax. This is a modest increase from the 2013 amount of $143,000.
  5. With the estate tax exemptions so much higher than in years past, 2014 presents a prime opportunity to review your existing estate plan and search for opportunities to utilize income tax savings techniques.

If your plan is in need of an update, the process is easier than you may think. Trust modifications do not necessarily require you to reinvent the wheel. To learn more about updates to trusts in California, view our free guide, The Ten Things You Must Know Before Creating (or Amending) Your Will or Trust. Call us at (714) 459-5481 today to schedule a consultation.

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm
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