Gift & Estate Tax Planning

The 2001 tax legislation raised the federal estate tax exemption to $1,000,000 per person in 2002 and 2003, to $1,500,000 in 2004-2005, to $2,000,000 in years 2006-2008, to $3,500,000 in 2009 and is repealed for this year, 2010.  In the year 2011, the estate tax returns to the $1,000,000 exemption.  However, there is currently Legislation pending in the U.S. Senate to permanently increase the estate tax exemption to $3,500,000.  Given the uncertainty surrounding this Legislation, it is wise to consider alternatives to taxation.

Without proper planning, your family may pay exorbitant death taxes to the federal government.  Planning in this area requires sophisticated techniques which may include the use of Qualified Personal Residence Trusts, Educational Trusts, Life Insurance Trusts and Charitable Trusts.   Whether you wish to make lifetime gifts or transfers at your death, advance planning must be seriously considered.

The recent tax legislation passed at the end of year 2010 raised the estate tax exemption amount, the amount each of you can pass tax free to your heirs, to $5,000,000 per person.  This exemption amount is effective for years 2011 and 2012.  At the end of year 2012, Congress will revisit the estate tax issue.  At this point there is no indication whether or not the current exemption amount will be retained.

For further questions please e-mail info@barbarabergstein.com.