Re-Thinking Estate Planning

The field of estate planning is changing. As the implications of the 2012 tax law changes are becoming clearer, estate planners are scrambling to develop new strategies for optimum planning. A recent article discusses several of these strategies.

One area of estate planning that has been affected by the 2012 tax law changes is lifetime gifts. In the past, many people would make large gifts during their lifetime in order to escape the estate tax. Now that there is a higher exemption, fewer people will have to utilize this strategy in order to remove assets from their estates.

Under the current tax law scheme, people should consider their income taxes when determining when and what to give. For example, if a person sells appreciated property during his or her lifetime, he or she will be taxed on the appreciation. Therefore, it is best to gift property that hasn’t appreciated, but that you expect will appreciate after you have gifted it. It is also a good strategy to gift appreciated property to a family member or friend who is in the 0% long-term capital gains tax bracket.

It is also important to consider whether the state you plan to retire in has state estate taxes. Often, people forget about state estate taxes.

For assistance in drafting and updating your estate plan, contact us at (626) 696-3145.

Request A Consultation

"*" indicates required fields

This field is for validation purposes and should be left unchanged.