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End of the year estate tax planning considerations

Many New York residents work hard to earn a comfortable income and accrue assets. For many, smart investments throughout the years have allowed their personal wealth to grow at a healthy rate. As 2013 draws to a close, many of these individuals will assess their life and life goals. The end of the calendar year is also a great time to assess one's estate planning goals and take a second look at potential estate planning tax implications.

The recent American Tax Payer Relief Act of 2012, aimed to lessen or eliminate tax burdens for many individuals. For example, previously an individual was allowed to gift up to $1 million dollars without paying taxes on that amount. As of 2012, that amount increased significantly to $5 million and is slated to increase each year with $5.25 million being allowed during 2013.

In addition to the considerable increase in the amount of tax-free money an individual is allowed to gift upon their death, changes have been made to the amount of unused estate tax exclusion assets that can be transferred to a surviving spouse. Under the new terms of the ATPRA, a couple is now allowed to pass up to $10.5 million dollars to surviving heirs, all tax free.

The end of the year, and holiday season, is also an opportune time to review one's personal annual gift exclusions. Currently, an individual is allowed to gift up to $14,000 each year without paying taxes on the gifted amount. For married couples, that amount doubles to $28,000. Individuals and couples would be wise to review the balance on annual gift exclusions for 2013 and determine if additional exclusions are necessary or appropriate. 

Estate planning can be complex and there are often many steps that must be taken on an annual or routine basis to ensure an individual is reaping maximum financial benefits. An estate planning legal professional is often a good resource for providing advice and assistance in estate tax planning.

Source: Richarmond Times-Dispatch, "Time to check the list for financial and estate planning goals," Carol Hazard, Dec. 15, 2013

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Weinstein & Randisi
290 Linden Oaks, Ste. 200
Rochester, NY 14625

Toll Free: 800-768-1780
Phone: 585-310-1578
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