Florida Estate Planning Lawyer Blog
The IRS recently announced that the gift tax annual exclusion will remain unchanged in 2010 at $13,000
The yearly amount of the exclusion is based on the Consumer Price Index and has increased from $10,000 in 1997 to $13,000 in 2009 and 2010. As long as your gifts to an individual are less than the exclusion amount, there is no gift tax return that is required to be filed and no gift taxes are due. Each spouse gets an exclusion so a married couple can actually gift $26000 to each individual without creating a tax liability or necessity for reporting.
With proper gift planning a family can transfer a significant amount of money to their children and grandchildren. Take a family who has 3 kids, each married and each with 2 grandchildren.
This creates 3 kids + 3 spouses + 6 Grandchildren. A gift of $13,000 to each by each parent could remove 312,000 a year from your estate. Do this for 10 years and you could remove over 3.1 Million dollars. Given that the current tax rate is 45%, this could save $1.4 Million in estate taxes.
There are other ways of reducing your estate taxes and you should discuss your objectives and goals with a Florida Estate Planning Lawyer or Florida Asset Protection Lawyer who will review your individual circumstances and make recommendations based on them.
Remember that gifting is not for everyone and as you get older and your chance of needing Medicaid increased, gifting can disqualify you from certain government benefits. If there are issues or concerns you should discuss them with your Florida Estate Planning Lawyer