Three Things To Know About Estate Planning

For 2015, you can leave gifts to other individuals upon your death worth up to $5.43 million free of any federal estate taxes.

This is the so-called estate-tax exemption If you are married, both you and your spouse are entitled to separate $5.43 million exemptions. If one spouse dies and does not use up his or her full exemption, the leftover exemption amount can be left to the surviving spouse.

A post in the Wall Street Journal notes that you can also give away a cumulative total of $5.43 million to relatives, friends, or whoever during your life without owing any federal gift tax.

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, the story notes.

However, gifts in excess of the $14,000 “freebie” will reduce both exemptions dollar for dollar.

However, most people will never reach the point of owing any federal estate taxes.

For those with very large estates, the $5.43 million exemption isn’t enough. That’s where the $14,000 gifts can help. They 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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