Will 2012 Taxes Affect You?
Here are some other major federal tax laws affecting estate planning in 2012:
- The top federal estate tax rate is 35 percent.
- The exemption level for generation-skipping transfer taxes is $5.12 million. The federal generation-skipping transfer tax rate is 35 percent. This means that if you leave more than $5.12 million in property to a grandchild or anyone two or more generations younger than you, your gift will incur a 35 percent tax.
- The top gift tax rate is 35 percent. The annual gift tax exclusion—the amount you can give to anyone gift tax–free each year—remains at $13,000 this year ($26,000 for married couples). So if you plan to give above the exclusion threshold, it will be subject to gift tax if your $5.12 million lifetime exemption has already been used.
Most of us know that we need an estate plan to determine who gets what from our assets when we are gone. Plus, we know that without a valid will, we are leaving it up to the state to determine who gets the majority of our assets and belongings after we die. But did you know that with proper planning you may be able to eliminate estate taxes? This will be especially important in 2013, when the estate tax threshold drops to $1 million, unless Congress makes additional changes.
Basic estate planning includes the following:
- Wills and revocable living trusts
- Financial and health care powers of attorney
- Living wills
- Beneficiary designation coordination
- Come 2013, many of us may also need tax planning
An Opportunity for Helping Others
Never become so engrossed in legal and tax complexities that you lose sight of the people and charitable organizations you want to help. If you believe in what we do and you'd like to save on future federal estate taxes by leaving a gift to KPLU in your estate plans, you can leave a lasting legacy in the most flexible way possible. Consider revocable options such as including us in your will or designating us as the beneficiary of a percentage of your retirement plan assets.
Your Next Steps
If you have questions about tax laws, please contact your estate planning attorney. You can contact Mary Dunaway at 253-535-7266 or firstname.lastname@example.org to learn about ways to leave a legacy while saving estate taxes at the same time.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.