Estate Tax Planning
Lake Mary, Winter Park, Longwood, and Maitland, Florida Estate Tax Planning Attorney
Although Florida has no
estate tax, Florida residents are still subject to Federal gift and estate
tax. In 2012, each person has an applicable
exclusion amount of $5,120,000 from gift and estate taxes, meaning that up to a
total of $5,120,000 can be cumulatively given away during lifetime and upon
death. Thus, for a decedent dying in
2012, if total lifetime gifts and death transfers are under that figure, there
is no estate tax.
In addition, each person can
give away up to $13,000 per year to any number of individuals under what is
known as the Annual Exclusion Gift. Such
gifts do not count toward the applicable exclusion amount so are completely gift
and estate tax free.
Through the use of a properly
crafted living trust, married couples can double up their applicable exclusion
amount and give away a total of over $10,000,000.
However, the current
applicable exclusion amount, which was established under the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010, will
expire on December 31, 2012. If congress
fails to act to extend it, then the applicable exclusion amount will drop down
to its 2001 lever of $1,000,000 per person.
Thus, if your estate is over $1,000,000 for a single person or
$2,000,000 for a married couple, you may wish to consider making gifts this year
in order to take advantage of the current law.
In additional to a properly
crafted living trust, there are other ways to avoid or minimize estate taxes,
such as the Irrevocable Life Insurance Trust.
For more information on estate tax and how to minimize or avoid them,
please contact us.