Federal tax laws have finally stabilized into a clear deal that benefits most estate owners across the country. Under the new rules, each individual can exclude $5.25 million, including gifts, from their estate taxes this year. In addition, the new top estate tax rate is 40 percent. Financial advisors say that under these new rules, very few estate owners will be affected by estate taxes – news that undoubtedly has many Floridians relieved.
There are a few options people can put into action that will take advantage of these new changes, which should benefit not only estate owners but their heirs. For example, if a couple uses the $5.25 million per person tax exclusion, they can exclude $10.5 million, which includes gift tax, and put their assets into a trust that will grow into a sizable tax-free benefit for their children and grandchildren.
Also, new gifting rules allow each person to give up to $14,000 tax-free, which estate owners can give to their children and grandchildren to start investments of their own.
Estate planning and tax rules can be complicated, regardless of the new and clearer rules. Accounting experts caution everyone to come up with a solid plan estate, no matter how large or small their assets are, in order to ensure their wishes are met. The best way to be sure wills, trusts, and estate planning are solid and foolproof is to consult with an experienced estate planning attorney, who can also advise on how to best take advantage of the new federal estate tax rules.
Source: Reuters, “New estate tax rules call for new planning tactics,” Amy Feldman, Feb. 26, 2013