With 2013 approaching and the prospect of a last minute estate tax compromise in Washington highly doubtful, now is the time to take advantage of soon to expire, historic estate preservation and tax savings opportunities.
In a nutshell:
Currently an individual can devise or gift to heirs $5.12 million free of gift or estate taxes. As of January 1, 2013, this amount is set to revert back to $1 million. It behooves anyone with an estate valued over $1 million ($2 million for a couple) to consider estate planning strategies now that will likely be unavailable next year.
One of the key strategies we are recommending is to make gifts during 2012, when the ability to transfer up to $5.12 million tax free is still in effect. While these gifts can be made outright to heirs, in order to protect the giftor, the heirs and the assets, we advise clients, in most cases, to make the gifts to irrevocable trusts.
The 2012 window of opportunity on such gifting strategies is quickly closing as there are planning sets involved in valuating assets, implementing trusts, etc. that can take a while to complete.
Read More: The Wall Street Journal's Family Value blog, "A Golden Age Of Gift Giving," May 25, 2012