Did you know that the amount of money you can gift away to your heirs is the highest it has ever been in history - $5,120,000! It’s a very rare thing when Congress decides to give every American a $5MM tax break, but that's exactly what they did back on December 17, 2010. Specifically, the Lifetime Gift Exclusion which has never been more than $1MM was raised by Congress to $5MM (it's indexed, so in 2012 it's $5,120,000) and it applies to only two years - 2011 and 2012. Time is short so we are passionate about telling everyone about this because it is an incredible opportunity for everyone with assets over $1MM to pass those assets to heirs without paying any wealth transfer taxes - and done correctly those assets will not ever be subject to transfer taxes. The number of Americans with assets over $1MM is a very large number today, especially when the taxes we are talking about are levied on all stocks, bonds, homes, other real estate and life insurance proceeds. It's estimated that the number of people subject to estate taxes or gift taxes in 2013 will go up by 13 times over tax year 2012!
As with anything there is a right way and a wrong way to take advantage of this opportunity. Done correctly, it is possible to give away wealth and retain some degree of control and instill family values. And gifts can be protected from the creditors, bad marriages, medical disasters, substance abuse, poor decisions, and business liabilities of future generations by employing the proper gift and estate tax strategies and vehicles.
2012 is the best time to gift wealth to your heirs - if you miss this window it will definitely cost you! In 2013 any estates or gifts over $1,000,000 will be subject to a maximum tax rate of 55%! For more information, listen here. http://www.voiceamerica.com/show/2043/what-about-wealth
Richard H. Bloomfield, CPA