How can I reduce my gift and estate tax liability?

With a “portable” exemption amount of $5,000,000 per person, a married couple with $10,000,000 or less in total assets will have to do very little to avoid paying estate taxes, providing there were no lifetime gifting that used any of credit amount.

The keys to planning in uncertain times are flexibility and vigilance.  Your estate plan should consider and provide for the current tax rates and exemptions as well as those future rates and exemptions that can be reasonably anticipated at the present time.  Additionally, you and your advisors will need to monitor both your financial situation and the changes in the law to determine if any adjustment to your estate plan is appropriate.

There are a number of techniques for reducing or eliminating estate, gift and GST taxes depending on the size of your estate.  Their suitability to your particular needs depends on a host of factors that we will be happy to discuss with you.

Life insurance is also a valuable tool that can be use to used to provide for the payment of estate taxes upon your death.  Life insurance policies owned by either you or your spouse may be transferred and held in an Irrevocable Life Insurance Trust (“ILIT”) with the proceeds going directly to your beneficiaries at your death. If you transfer a life insurance policy to an ILIT by gift and you survive for three years after such gift, the insurance proceeds will not be included in your estate for estate tax purposes.

For assistance with formulating and implementing an estate plan, please contact David or Stephen.