Estate Tax

Hanging 5 x 5 Powers

Posted by on Feb 5, 2014 in Estate Planning, Estate Tax, Federal Taxes | 0 comments

A common term thrown around in the world of federal Estate and Gift Taxes is “Hanging 5 x 5 Powers” or “Hanging Withdrawal Rights”.   This concept exists in trust planning to balance two concepts of tax law when making gifts to an irrevocable trust:  In order for a gift to qualify for the annual gift tax exclusion of $14,000 per recipient (as of 2014), the gift must be a gift of a present interest (not a gift of a right to receive something in the future).  When a trust beneficiary allows a general power of appointment to lapse, the beneficiary is deemed to have made a gift to the other...

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Estate Tax Likely to Remain (Mostly) Unchanged

Posted by on Jan 2, 2013 in Estate Planning, Estate Tax, Federal Taxes | 0 comments

January 2, 2013 – With the “fiscal cliff” looming, estate planners and tax attorneys were left wondering what to do to take advantage of historically tax-friendly Estate Tax laws.  The answer may have been to do nothing different. Under 2012 tax law, the Estate Tax only applied to individuals dying with more than $5 million of net worth ($10 million for married couples).  As with many tax laws, the rules were set to drastically change on January 1, 2013.  Without an act of Congress, the Estate Tax exemption was set to go from $5 million to $1 million and the top Estate Tax...

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Using a GRAT to Strategically Reduce Estate Tax

Posted by on Jul 23, 2012 in Estate Planning, Estate Tax, Federal Taxes | 0 comments

A very effective tool in reducing federal Estate Taxes is lifetime gifting.  Because large lifetime gifts are added back to a decedent’s taxable estate (generally, all gifts greater than $13,000 in any year to any one recipient), lifetime gifts need to be done strategically to have a real impact on the overall Estate Tax picture. The Estate Tax benefits of lifetime gifting can be leveraged by gifting assets that are expected to appreciate in value, thereby removing the appreciation from the grantor’s taxable estate.  Even greater leverage can be utilized by gifting appreciating assets with...

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What is happening with the Estate Tax?

Posted by on Jun 7, 2010 in Estate Planning, Estate Tax | 0 comments

The Detroit news today has a great article that summarizes the confusion regarding the estate tax.  As the article indicates, Congress had “planned” to correct many of these issues when it passed the Bush tax cuts many years ago.  Unfortunately they have not come back and resolved many of these issues. The confusion that is continuing to exist regarding this issue is forcing many people to revisit their estate plan to ensure that their heirs are protected.  As always we can help to make sure that a proper plan is put in place for the...

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