Last month the Treasury Department proposed rules that could dramatically impact estate tax planning. Specifically, the Treasury Department is planning to limit, or even eliminate, the use of "valuation discounts" for closely-held companies, LLCs and other assets. The Treasury Department issued these proposals in August. On December 1, 2016, there will be a public hearing to discuss the merits of this proposal. It is possible the Treasury Department will formalize changes to these rules before the end of 2016.
Many New Jersey residents have worked hard to build a strong base of wealth. Retaining as much of that wealth as possible becomes a priority for many families. Understanding the proper steps required to do so can be a challenge, as there are a wide range of rules in place that must be carefully adhered to in order to achieve a favorable result. By working with an attorney, individuals and families can create an estate tax planning strategy that meets their needs.
Each year, the IRS announces how much the estate and gift tax exemptions will be for the following year. Recently, the announcement was made that the estate tax exemption will rise to $5.43 million per person, and the annual gift tax exemption remains at $14,000 for 2015. The $90,000 increase could allow a New Jersey resident to do more gifting during his or her lifetime.
Many New Jersey readers are aware of the tax benefits of establishing and funding a Section 529 college savings account. The money deposited within is allowed to accumulate interest tax-free, and there is no penalty for withdrawing funds to cover the cost of tuition and other college needs for the account's beneficiary. However, there are also estate tax-planning benefits associated with a 529 account, which is a fact often overlooked by many.
Good news for the wealthy or the particularly comfortable was just released by the federal government. In 2014, individuals in New Jersey and across the country will be able to add an extra $90,000 free from federalestate tax to the amount that they are allowed to transfer to a person during their life and at their death.
In our previous post, we began looking at the new fiscal cliff deal Congress came up with in the 11th hour, and the way it will affect estate planning in the coming year. As we noted, The same exemption amount will apply permanently, with adjustments for inflation, meaning that wealthy estates have less to pay in estate taxes.
We've been talking about the estate and gift tax exemption debacle on this blog for a number of months now, informing our readers about the changes that could come in the New Year, and trying to stay on top of any developments. Now that Congress has come up with a fiscal cliff deal, we are able to relate to our readers how the changes will affect estate planning in the coming year.
Say you have a second spouse, and you want to ensure that he or she receives a significant amount of your estate after you die. Seems simple enough, right? Just include in your will the amount you want your spouse to inherit.
Our readers have probably heard the talk about the coming fiscal cliff in Washington. For those who are unaware of the debate, it basically involves the cumulative effect of various laws that would result in tax increases and spending cuts if left unchanged. The focus of much of the debate has been on income tax, but estate and gift tax exemptions are also implicated. Where
Our regular readers know that we've spoken frequently about the upcoming changes in tax law that will impact estate planning in the coming year. The gist: tax bills on large gifts are set to increase substantially in 2013, which means now is an ideal time to do gifting. Of course, with the year almost at its end, the biggest challenge now is getting it done in time.