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Thank Congress if You Made Big Gifts in 2012

Hank Wittenberg has a great article on estateplanning.com on why those of you who did year end planning in 2012 made the right choice, even though Congress extended the generous gift and estate tax exclusions with the American Taxpayer Relief Act. The tax act signed into law by President Obama last week provided some very good estate planning provisions. Surprisingly, I have already read and heard complaints from other estate planning attorneys…

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New 2013 Gift Tax and Estate Tax Rates – Now What?

Congress surprised us again and passed the American Taxpayer Relief Act (don't you love the catchy name) on January 1 to temporarily avoid the fiscal cliff. Overall, the new law is much better than the experts expected. It extends the estate tax and gift tax exclusions of 2012 and even indexes them for inflation. In 2013, you can gift $5,250,000 with no gift tax. In 2013, you can die with $5,250,000 with…

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Barron’s on Why You Should Gift Now

Great article from Barron's explaining the lifetime bypass trust and how couples can gift over $10,000,000 to each other (although most gift much less) and avoid estate tax if they act by December 31. For married couples, a popular strategy is for each spouse to create a trust that will ultimately provide for heirs, but that also names the other spouse as a beneficiary. The advantages are clear: Couples can move as…

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How the Lifetime Bypass Trust Works: Attention CPAs

Many of my clients are interested in the Lifetime Bypass Trust. And some are vetting the concept through their CPAs. Here is an email (with the names removed) I have sent to several CPAs to clarify this amazing but simple planning strategy. The structure we are proposing is a lifetime bypass trust. The concept is the same as used with an A/B trust, or bypass trust. When a bypass trust is created…

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Lifetime Bypass Trust

Until December 31, the lifetime gift tax exclusion is $5,120,000 per person. Unless Congress acts, this amount will drop to $1,000,000 on January 1, 2013.  It is usually best to use a tax exemption as soon as possible – use it or lose it. The opportunity, good now through the December 31, is to gift assets out of your estate and forever exempt the assets and all future appreciation from estate tax.…

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Act by Dec. 31 to Avoid Estate Tax (click for slide show)

We now know the next President and the composition of Congress. Most likely, the historic estate and gift tax exclusions that end on December 31, 2012, will never be seen again. This may be the best opportunity in your lifetime to remove assets from your estate and forever avoid estate tax. Watch the slide show below to learn more about what you can do in the remaining days of this year to…

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Sell Now – Capital Gains Tax Goes Up in 2013

From the Tax Prof Blog citing the WSJ. George Lucas isn't alone. Business owners race to their sell businesses in 2012 to avoid higher capital gains tax in 2013. Wall Street Journal:  Looming Tax Hike Motivates Owners to Sell, by John D. McKinnon: A looming increase in the capital-gains tax rate next year is fueling sales of some privately-held businesses. Many business owners—mostly founders who could gain a lot from a sale—are looking to close…

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Annual Gift Tax Exclusion Up to $14k in 2013

The IRS will increase the annual gift tax exclusion from $13k to $14K in 2013. The annual gift tax exclusion is the amount you and your spouse can each gift to anyone without dipping into your lifetime gift tax exclusion (the lifetime gift tax exclusion is currently $5,120,000 and scheduled to drop to $1M in 2013).  From Forbes: There is one change taking effect in January 2013 that’s new: the annual gift…

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Gift Now and Avoid Estate Tax

If you have a net worth of $1M or more (or as a couple, $2M or more), and act now, you could forever remove the threat of estate tax. But if you don’t act by the end of the year, you will miss a historic opportunity. The 2012 estate tax exclusion and gift tax exclusion are both $5,120,000 - way higher than they have ever been. But unless Congress and the President…

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