In the spirit of year-end planning, there will be a change in the gift tax exemption for 2015. Have you heard the news?
A single person can currently give $5.34 million total to other people tax-free. After that, any gifts are taxed.
Forbes, in a recent article titled "IRS Raises Limit on Tax-Free Lifetime Gifts for 2015," reports that this limit will increase to $5.43 million in 2015.
Gifting is an important part of estate planning for wealthy people. It provides a way to give money to family members before you pass away and lower the total value of an estate to minimize the impact of the estate tax.
This gift tax change will allow people who have already reached the exemption limit to give a little more, perhaps to a relative who was not yet born when the lifetime limit was previously reached.
The extra $90,000 could also be used to give to other relatives who might be in need. While it might not seem like very much, $90,000 could do a lot of good for one individual.
Because of this exemption increase, now would be a good time to consult an experienced estate planning attorney to revisit your gifting plan.
At the same time you could talk to the attorney to determine whether any other portion of your estate plan needs to be revised to account for other laws that might have changed.
Understanding the complexities of Tax Planning is just a part of successful estate planning. To ensure a successful plan, we at Idaho Estate Planning will: 1) educate you and your helpers; 2) take the time to get to know you, your family, your desires, your concerns, your goals, and your potential problems; 3) gladly and patiently answer questions until you understand the concept or issue; and, 4) based on experience with the problems and results caused by poor planning, help you design and implement the plan that fits your concerns and goals. Remember, good planning is no accident.