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Jackson & Campbell, P.C.
Attorneys and Counselors at Law
Office Locations:
Washington, D.C.
Vienna, VA
Baltimore, MD
Rockville, MD
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DISCLAIMER: Use of this website does
not create an attorney-client relationship.
This publication does not constitute
legal, accounting or other professional advice. Although it is intended to
be accurate, neither the publisher nor any other party assumes liability
for loss or damage due to reliance on this material.
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Trusts & Estates | Volume
2, Issue 3, March 2010
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QUICK TIP
Is it Time to Review Your Plan?
Proper estate planning is a process, not simply a one-time event. Therefore, it only makes sense to periodically review your planning goals and legal instruments. Review this
list of life changes that could alter your estate-planning needs. If you notice some areas that might apply to you or your family, it may be time for an estate plan check-up.
- Marriage, remarriage or divorce
- Death of a spouse
- Substantial change in estate size
- Death or incapacity of an executor, trustee or guardian
- Move to another state
- Acquisition of property in another state
- Birth or adoption of a child or grandchild
- Serious illness of a family member
- Change in business interest or retirement
- Change in insurability for life insurance
- Marriage or divorce of a beneficiary
- Change in beneficiary attitudes
- Financial irresponsibility of a child
- Change in tax law
- More than two years since review of plan with attorney
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Maximizing Your Lifetime Wealth Transfers
Lifetime Gifting: Part of Your Multi-Generation Estate Planning
 Would you rather
transfer your wealth to the IRS or to your loved ones? If you answered the IRS, then disregard this article. On the other hand, if you answered your loved ones, then read on.
We will review some of the relevant tax rules for lifetime gifting, then examine two common transfer methods (along with a few of their potential pitfalls).
Gifting Fundamentals
Every taxpayer may transfer up to $13,000 each year to an unlimited number of individuals. This is known as the Annual Gift Exclusion (AGE).
Through gift splitting, spouses may give a total of $26,000 each year to an unlimited number of individuals (even if only one spouse is the sole source of the funds gifted). Such
lifetime gifts made within these dollar limitations do not trigger gift taxes when made, nor do they reduce the combined Estate Tax Exemption Amount available to protect lifetime
transfers of wealth exceeding AGE limits and post-mortem transfers of wealth. Accordingly, maximizing transfers within the limits of the AGE has been and remains a prudent method to
transfer wealth between generations. [Exception: Qualified payments in any amount made directly to an educational institution for tuition and directly to a provider of
medical care on behalf of any individual are fully excluded from gift tax consideration. They may be made without dollar limitation.]
Learn more about transferring wealth to
your loved ones...
Crummey Trusts
There are many non-tax benefits to making lifetime gifts to loved
ones, aside from the obvious tax benefits. For example, what better
way to preview the financial maturity of your loved ones with an
inheritance in the future than through a dress rehearsal in
the present … while you are still in the audience?
Keeping Control
If you are like most people, you may be
reluctant to part with control over how your lifetime gifts will be
used once transferred. Unfortunately, when you retain direct control
over a gift, the value of the gift (and its appreciation) may be
included in your estate for estate tax purposes upon your death.
Worse yet, the gift may be taxable at the time of transfer as a
future interest gift, rather than treated as a nontaxable
present-interest gift.
Learn about the many non-tax benefits of
making lifetime gifts with Crummey Trusts...
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