Is It Time To Update Your Estate Plan?
If any of the following events are about to occur or have recently occurred in your life, there’s a good chance that it’s time to reevaluate your estate plan to make sure that it still fits your needs:
- Birth in the family
- Death in the family
- Illness of a parent or other family member
- Marriage in the family
- Divorce in the family
- Disability of a child or other family member
- Receipt of a substantial assets, whether through inheritance, insurance proceeds, gift, or windfall
- Major business acquisition
- Major business sale
- Contemplated sale of business or real estate
- Contemplated sale of large stock holdings
- Contemplated large gift to charity
- Contemplated large gift to an individual
When possible, planning in advance of an event may achieve the best results. However, when planning in advance is not possible, taking action after an event has occurred is almost always advantageous. Through proper planning and structuring, your personal goals may be achieved and your income, capital gains, gift, estate taxes may be minimized.
For 2007-2008, the amount of property a person can pass exempt from estate taxes remains at $2,000,000. The top estate tax rate is 45% for 2007-2008. Congress has not yet dealt with a permanent solution to the estate tax problem. This means that the current law remains and that the exemption will be increased in the year 2009 to $3,500,000. However, the estate tax will be eliminated in the year 2010 and the estate tax will be revived in 2011 with a $1,000,000 exemption.
The amount that a person may give away each calendar year without incurring a gift tax remains $12,000 per gift recipient for 2007. The otherwise taxable lifetime amount that a person may transfer that will be exempt from gift taxes remains at $1,000,000.