Three Things To Know About Estate Planning

Here are three simple but important things you need to know about estate planning.

  • The estate tax exemption

For 2015 you can leave gifts to others upon your death up to $5.43 million free of federal estate taxes. If married, both you and your spouse have this exemption, totaling $10.86 million.

A story in the Wall Street Journal also points out two other important figures to know:

  • The gift tax exemption

You can also give away a cumulative total of $5.43 million to family or friends during your life without owing any federal gift tax. If married, both spouses get the $5.43 million exemption.

Gifts made under the $14,000 annual gift tax exclusion rule will not trigger any federal gift taxes nor will they reduce your federal gift tax or estate tax exemptions. Gifts in excess of the $14,000 β€œfreebie” will reduce both exemptions dollar for dollar.

  • The $14,000 annual exclusion

Gifts made up to this amount each year reduce your taxable estate.

If you have questions about estate planning, feel free to call us for a consultation at (626) 696-3145.

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