Right now, gifts to trusts can take advantage of high tax exemptions and remove future appreciation of assets from taxable estates. One example available to spouses is making a gift to a trust that allows for a qualified terminable interest property (QTIP) election.
People tend to think of ‘529’ education-savings plans as an excellent way to save and invest tax-free for college or schooling costs, and they are.
Wealthy families could face combined tax rates of as much as 61% on inherited wealth under President Joe Biden’s tax plan, according to a recent analysis.
Under a tax-law exception this year, clients can make a lump-sum 2021 gift of up to $75,000 to fund a 529 college savings account for a child or grandchild (or any other college-bound individual) and claim a federal gift tax exclusion for the full amount.
The estate tax exemption raised by the Tax Cuts and Jobs Act will sunset in five years—possibly sooner, as the new Congress gears up for a Biden tax overhaul.
No one can predict the future—and navigating that reality is precisely what makes estate planning so complicated.
Facing down an uncertain election outcome and the possibility of tax reform in 2021, many families started transferring substantial amounts of wealth last year, making large gifts to take advantage of the historically high gift and generation-skipping transfer tax exemptions.
So, you inherited a retirement account. Before you make any decisions on when and how to access the money, it’s worth familiarizing yourself with the rules that apply to different beneficiaries.
The For the 99.5% Act reduces the estate tax exemption to $3.5 million per individual and $7 million per couple. The bill adds higher tax brackets for larger estates.
Protecting a nest egg is tough enough. Don’t make the situation far worse.
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