Estate Planning For The 99 Percent

Many lawyers and financial managers love to brag about their super wealthy clients. But privately, they admit most of their clients fall into a lower category.

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These are clients with net worths of between $5 million and $10 million, according to an article in Forbes.

And for these clients, the best thing that has happened to them came with passage of the American Taxpayer Relief Tax Act of 2012, the article says. That act contained a planning device called โ€œportabiity,โ€ which made estate and tax planning for this group of clients much easier.

In a nutshell, this made it possible for widows and widowers to carry over the estate exemption of the spouse who died most recently and add it to their own.

It enables married couples to transfer $5.34 million apiece ($10.68 million total) tax free. This amount will grow to $6.58 million in 10 years.

To take advantage of portability, the estate of the spouse who died must file an estate tax return called IRS Service Form 706 even if no tax is due. This is due nine months after death, with a six month extension allowed.

There are still other planning tools available and may be preferable in some cases. It is best to consult your estate planning attorney on these.

If you have questions on your estate plan, feel free to contact us at (626) 696-3145 for a consultation.


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