Wednesday, October 31, 2012
As I have previously discussed, if there is a holiday that is relevant to the practice of estate planning it is Halloween. However, the desire to plan for death is not as ghoulish as most people probably believe. It is important to remember the old adage, there are only two things that are certain in life: death and taxes. This year is no different. In fact, this principle has greatly affected the practice of estate planning here with 2012 coming to a close.
It is important to note that if a person wants to take advantage of the $5.12 million estate/gift tax exemption, there is still time but a person must act quickly. Remember, if Congress chooses to not act then the exemption will return to its pre-Bush era tax cut levels. This means that the exemption will be set at $1 Million with a top tax rate of 55% for all income that exceeds the exemption amount. There are other reasons why this a good opportunity for estate planning. For example, a person could gift property that has the potential to appreciate in value. In other words, the owner could gift the property and any appreciated value on that property would be able to escape the estate tax. Furthermore, there is a variety of estate planning tools that a person could use to retain greater control over the gift, such as a trust, if a person is reluctant to make gifts.
See Robert Wood, Estate Planning Isn't Ghoulish and Can Save Millions This Year, Forbes, Oct. 30, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.