Creating an estate plan is an important task for any individual and his or her family. There are many considerations that are at play during this process. One issue that should be addressed pertains to estate and gift taxes. The rules and laws relating to these taxes tend to change frequently. In 2015, we are working with a specific set of laws that must be carefully planned around.
3 Tax Considerations for Estate Planning in 2015
There are important tax considerations to address when preparing your 2015 estate plan. Here are three of them:
- The federal estate and gift tax exemption amount. In 2015, every person is entitled to leave or give away up to $5.43 million in assets without owing estate or gift tax. If your estate is valued at more than this amount, it is important to consult with your attorney about how to minimize potential estate tax. The exemption amount will increase according to inflation amounts each year unless or until Congress opts to make changes.
- The rule relating to portability for spouses. Spouses continue to be entitled to combine their two estate tax exemptions. This gives a married couple the ability to give away or leave nearly $11 million in assets to their loved ones without incurring estate tax liabilities. This is known as “portability” of the estate tax exemption. In order to utilize portability, your estate plan must give the personal representative of your estate the authority to file an estate tax return and make all proper elections after you pass.
- The current gift and estate tax rate. If you have any estate that may incur estate or gift tax liabilities, the rate for this year is 40%. This is actually the lowest rate in many decades. The rate also applies to the generation-skipping transfer tax, like a gift transferred from grandparent to a grandchild. When creating your estate plan, it is important to take the actual tax rate into consideration to provide the plan that is right for your family.
Fortunately, there are people who can help you address all of the necessary considerations when creating your estate plan. We are here to guide you through this process. We encourage you to check out the client testimonials from our many previous clients today.