Temporary Lapse of Estate Tax Good News for Estate Planning
It might seem like getting any advantage from the 2010 estate tax lapse would have to mean losing a loved one. But those in a position to dole out some cash while still alive – and their recipients – will be able to benefit as well. When the estate tax was suspended on January 1st, 2010, the gift tax rate also fell from 45% to 35%. Barring congressional action it will go back up to 55% come 2011.
That means that those deciding to make taxable gifts this year can potentially save their loved ones a great deal of money on taxes. The Congressional Budget Office has predicted that a rush of wealthy people bestowing taxable gifts on their heirs may cause gift tax income to the federal government to increase tenfold this year. Unfortunately, the congress still has the option to reinstate the estate and gift taxes at any rate they see fit, and they can do so retroactively. However, a carefully constructed estate plan can still help you maximize your tax savings no matter what the congress decides to do.
In order to benefit from this unprecedented opportunity, people will need to take fast action to creatively plan and draft trust provisions that minimize the tax burden on their heirs. If you live in the Jacksonville, Florida area, please contact an estate planning attorney for estate planning and gifting legal counsel.
Read more details about how to minimize estate and gift taxes at Estate Tax Lapse Helps Healthy Rich.
