December 22, 2014

New Tips for Estate Planning

According to information published by the Wall Street Journal, many families should now be more concerned about capital gains taxes than the federal estate tax when it comes to estate planning.

For the last ten years, estates of more than $1.5 million could face federal tax rates of up to 50% — with rates jumping around from year to year. However, changes made by Congress last year have alleviated the worries of many wealthy Americans. Congress set the top estate-and-gift tax rate at 40%, and raised the exemption to $5 million per person to adjust for inflation. Now, those who will be exempt from the tax can focus on minimizing long-term capital gains taxes — an idea that would have seemed silly just a few years ago. And now that the top federal rate on capital gains taxes has risen two thirds in the past two years, this focus could be especially useful.

The best advice for those who will now be covered by the federal estate tax exemption? Reconsider your estate planning strategy. Here are the areas that WSJ recommends you consider:

  • Reset Capital Gains
  • Tap the Right Assets
  • Rethink Your Trusts
  • Reconsider Gifting
  • Beware of State Taxes

Read more on the subject at TaxProf Blog.

Where Not to Die

Posted In: Wills & Trusts