For those weighing what to do with the assets they have accumulated over a lifetime, the next few weeks may be time to make the final ca If an individual waits too long to begin the process, there is a good chance they won’t be able to complete end.
If you have been following national politics and the impending fiscal (tax) cliff, now is the time to make your move! There are important estate planning opportunities expiring on December 31, 2012.
Don’t hold your breath that the White House and Congress will come to the rescue in the nick of time.
As a recent MarketWatch article sums it up, there’s “No playing chicken with estate tax deadline.” The present estate planning laws offer an unprecedented and generous gift tax exclusion. That is worth thinking about, too. The exclusion amount of the estate tax is tied to the gift tax amount and is therefore just as generous (but not many taxpayers are keen to qualify for that before year’s end).
Gifts, on the other hand, are easy to make. This especially is true as the holiday season is nearly upon us. With the current exclusion set to $5.12 million, you can give that much in your lifetime over and above the annual exclusion amount of some $13,000. Better yet, you can give this entire amount before December 31 if you so choose to secure the full exclusion amount. Why? Because the exclusion is automatically set to drop to $1 million unless the White House and Congress take action.
The article cautions if you wait too long to begin the process, you may miss out on the wealth transfer jackpot as it can be too difficult to complete these transfers in a matter of weeks. So make your move before the Estate Tax alarm sounds!
You can learn more about estate tax planning on our website. Be sure to sign up for our complimentary e-newsletter to stay abreast of issues like these that could affect you, your loved ones and your estate planning.
Reference: MarketWatch (October 2, 2012) “No playing chicken with estate tax deadline”