Lance Denha Law Office
For over a decade, the future of the federal estate tax has been uncertain. Both Republicans and Democrats have sharply different strategies, with some calling for an increase in federal gift and estate taxes and others advocating for total elimination. Even if you have never done estate planning, this year is a good time to start. Remember that in 2001, Congress increased the estate tax exemption in measured steps until December 31, 2009. Everyone assumed there would be comprehensive reform, but Congress failed to act.
However, one thing is sure, for the remainder of 2012, each individual can transfer up to $5,120,000 million free of gift tax or leave up to that amount tax-free to anyone he chooses at death. Assuming an individual plans to live through the remainder of the year, the lifetime giving option is the most viable. At the very least, individuals should consider making gifts of their annual exclusion amount ($13,000 per donee in 2012 and increasing to $14,000 as of January 1, 2013) or gifts on an unlimited basis for tuition and/or medical expense payments. Such gifts can be made over and above the gifts that will take advantage of the gift tax exemption.
Despite having a multitude of gift giving strategies to choose from, many clients are still reluctant to make transfers for various reasons. Whether due to possibly needing the money again or distrusting the beneficiary or the environment the beneficiary oper...