Assuming the details in the final bill currently under negotiation are not changed,  (the discussions surround the amount of the Exemption, and the tax Rate), the unification of Exemptions for lifetime gifts and estates at death opens up great opportunities for our clients. Under the law before 2010, the exemption for estates increased each year up to the final $3.5 million in 2009-but the amount of lifetime gifts you could make (in excess of annual exclusion gifts of $13,000 per donee) never went above $1 million.  The original amount of your death-time Estate Tax Exemption is always (in the past and under proposed law for the next two years) reduced by the amount of the Lifetime Gift Tax Exemption used through lifetime gifts.  Don’t forget […]

Low interest rates used by the IRS to value interests in property, coupled with precipitous declines in asset values present a unique opportunity for families to transfer their wealth to their heirs on a tax efficient basis.  For example: Charitably inclined families can implement a Charitable Lead Annuity Trust (“CLAT’s”), in which your designateed charity receives  a stream of payments for a predetermined period of years, while you receive a charitable income tax deduction, before your children or heirs receive the remaining trust property transfer tax free.  This remainder can be substantial, and studies have shown this technique to have favorable outcomes 92% of the time when interest rates are low, as they are now. Long term sales to Grantor Trusts (benefitting your children and […]