Yardley Estate Planning, LLC
Federal Estate and Gift Tax
Federal Estate and Gift Tax law permits each taxpayer to
transfer a certain amount of assets free from tax during his or
her lifetime or at death. The amount of money that can be
shielded from federal estate or gift taxes is determined by the
federal unified tax credit. The credit is used during your
lifetime when you make certain taxable gifts, and the balance,
if any, can be used by your estate after your death.
In addition, you can make annual gifts of $13,000 or less to
each donee that you would like to gift to, and these gifts are
not counted against the lifetime amount. Keep in mind that
while you can plan to minimize taxes, your estate may still
have to pay some federal estate taxes. What’s more, your
estate may be subject to state estate or inheritance taxes,
depending upon where you live and the size of your estate.
Sweeping changes were made to the tax laws by the
Economic Growth and Tax Relief Reconciliation Act of 2001.
In addition to the many income tax changes, the law revised
the Federal Estate and Gift Tax. The law repeals the tax in
2010 and brings it back one year later, unless Congress
extends the repeal. The 2011 reinstatement brings back the tax
to the way it was before the law was enacted.
In the meantime, there are a number of phased in changes:
• the estate tax exclusion amount is $3.5 million in 2009;
• the top federal estate tax bracket (and Generation-
Skipping Transfer Tax rate) was reduced from 55% to 45%
for 2007—2009;
• the gift tax remains, but the top tax rate is also reduced
from 55% in 2001 to 35% by 2010;
• since 2002, the lifetime gifting exclusion has been
capped at $1,000,000.
All property (and certain powers) that a person has at the time
of his or her death is subject to tax. The tax is payable by
your estate - usually before property is distributed to the
beneficiaries of the estate. Barring an extension, the estate tax
is due within nine (9) months of your death.
The unlimited marital deduction, qualified charitable
organization deduction, and unified transfer tax credit enables
most estates to be distributed without incurring any federal
estate tax. In addition, there are many ways in which you can
structure your estate - to take advantage of available
exclusions, exemptions, credits and deductions - so that the
tax bite is reduced.
Federal Estate and Gift Tax law permits each taxpayer to
transfer a certain amount of assets free from tax during his or
her lifetime or at death. The amount of money that can be
shielded from federal estate or gift taxes is determined by the
federal unified tax credit. The credit is used during your
lifetime when you make certain taxable gifts, and the balance,
if any, can be used by your estate after your death.
In addition, you can make annual gifts of $13,000 or less to
each donee that you would like to gift to, and these gifts are
not counted against the lifetime amount. Keep in mind that
while you can plan to minimize taxes, your estate may still
have to pay some federal estate taxes. What’s more, your
estate may be subject to state estate or inheritance taxes,
depending upon where you live and the size of your estate.
Sweeping changes were made to the tax laws by the
Economic Growth and Tax Relief Reconciliation Act of 2001.
In addition to the many income tax changes, the law revised
the Federal Estate and Gift Tax. The law repeals the tax in
2010 and brings it back one year later, unless Congress
extends the repeal. The 2011 reinstatement brings back the tax
to the way it was before the law was enacted.
In the meantime, there are a number of phased in changes:
• the estate tax exclusion amount is $3.5 million in 2009;
• the top federal estate tax bracket (and Generation-
Skipping Transfer Tax rate) was reduced from 55% to 45%
for 2007—2009;
• the gift tax remains, but the top tax rate is also reduced
from 55% in 2001 to 35% by 2010;
• since 2002, the lifetime gifting exclusion has been
capped at $1,000,000.
All property (and certain powers) that a person has at the time
of his or her death is subject to tax. The tax is payable by
your estate - usually before property is distributed to the
beneficiaries of the estate. Barring an extension, the estate tax
is due within nine (9) months of your death.
The unlimited marital deduction, qualified charitable
organization deduction, and unified transfer tax credit enables
most estates to be distributed without incurring any federal
estate tax. In addition, there are many ways in which you can
structure your estate - to take advantage of available
exclusions, exemptions, credits and deductions - so that the
tax bite is reduced.
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| Yardley Estate Planning, LLC 41 University Drive, Suite 400 Newtown, PA 18940 Phone (267) 573-1019 Toll free (877) 251-4393 Fax (267) 604-9164 mgarry@yardleyestate.net www.yardleyestate.net |
