Estate and Gift Planning

Planning for Estates

An estate plan is really a plan for transferring property from one generation to the next, whether during life-time or at death. Every estate plan addresses the following questions:

  • What are my assets today, what is their value and how are they titled?
  • How should I title and hold my assets to meet my needs and accomplish my goals?
  • Who should act in my behalf if I die or if I become incapacitated?
  • Who should receive my property and when and how should they receive it?
  • What are the legal and tax ramifications of transferring my property?¹

Estate plans typically include an assortment of legal documents which address the questions posed above. Basic documents include wills, trusts, durable powers of attorney, health care powers and living wills. Meeting with one of our estate planning attorneys will help you:

  • Identify, organize and properly title your assets;
  • Design and document a plan to meet your specific needs and goals;
  • Identify and properly designate personal representatives, trustees, heirs and beneficiaries.

Planning for Gifts

In planning for the transfer of property, many people desire to make life-time gifts, whether to family members, friends or charities. Planning for these gifts is really a sub-set of estate planning and involves careful consideration of:

  • the amount and timing of the gifts;
  • the character and capacity of the donees; and
  • the impact of federal gift², generation-skipping³ and income4 tax laws.

We Can Help!

Not everyone needs a complicated estate plan, but everyone can benefit from estate planning. We will start with your goals and your needs and then help you put into place the estate plan that will help you achieve your goals and meet your needs.

  • How you document (or fail to document) your estate plan can dramatically affect your estate’s legal obligations. Additionally, federal law currently imposes a tax on transfers at death known as the estate tax. The maximum marginal rate of this tax is 40%. Currently, only estates exceeding $5,540,000 will be subject to any estate tax.
  • Many people are surprised to learn that in addition to imposing a tax on estates, Uncle Sam also taxes life-time gifts to individuals. Federal law currently unifies these taxes: both the rate of tax and the amount which is excludable from tax are the same under federal estate and gift tax law. At present, the maximum, marginal rate for both gift and estate tax is 40%. The life-time exclusion from gift tax is $5,540,000 per taxpayer (not including annual exclusion gifts (currently $14,000 per donee)). This is equal to the applicable exclusion amount for federal estate tax. Use of the life-time gift exclusion reduces the applicable exclusion amount available at death.
  • In addition to the gift tax, federal law imposes an additional tax on gifts which skip a generation. This is called the Generation Skipping Tax or the GST. For example, a grandparent’s gift to a grandchild is potentially subject to the GST. Fortunately, the GST is also currently unified with both the estate and the gift tax for purposes of both rate and exclusion.
  • Gifts to qualified charities are deductible from federal gross income (subject to certain limitations). Structuring charitable gifts through certain trusts can also result in the avoidance of the tax on capital gains.