By James O'Brien.
If you meet the threshold for?estate taxes, think of 2014 as a landmark year in your planning. The rules surrounding exemptions and gifts have changed, and the impact could be far-reaching for your family -- perhaps more so than many planners initially realize.
As the new structures fall into place and the details of new limits and portability within your legacy assets come into focus, you'll want to pay attention to the following key details. They represent remade horizons and revised parameters for?estate planning?-- all unique to this year, and all of them sure to influence your next estate moves.
Tax changes you need to address: estate planning 2014
In general, if you're going to be affected by the following?2014 estate tax rules changes, it's because you're among the wealthiest of estate planners in the United States.
Being subject to the estate tax means that your individual estate assets start with at least $5.34 million in the balance -- a number adjusted upward for inflation from $5.25 million during 2013.
That's much higher than the roughly $1 million that the estate tax would have reverted to without new legislation early last year. A married couple's federally taxable estate, thus, now begins in the realm of $10.68 million. One result of this new number is that we're talking about something on the order of only two in every 1,000 cases.
But if you are in that category, these changes stand to profoundly affect how you maintain your wealth. Learning about the shifts underway can save you money and headaches as you navigate the estate-planning waters.
Some states have independent state-level estate or inheritance taxes, and some of these have exemptions that are lower than the federal level. For example, in New Jersey the exemption threshold is $675,000. At least 20 states have their own taxes ranging generally from 10% to 16%.
Individuals and couples should investigate the details pertaining to their state of residence -- and also those details of any state in which they own property.?Only two states, Connecticut and Minnesota, impose a gift tax.??
Finally, the estate and gift taxes are never entirely tucked away from the effects of political and budget waves that can rock Washington.?It's always possible that the estate- and gift-tax exemption amounts and rates will see renewed scrutiny. That means the exemption amount could be reduced in the future to bring more estates into the system.
So while death and taxes may be our certainties in life, what estate and gift rules will look like in 10 years -- or even next year -- is far from set in stone.
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