Estate and gift planning

Estate and gift planning, done right, evolves over time to reflect your changing goals and circumstances.

 
Estate and gift planning

Thoughtful estate and gift planning helps you preserve your wealth and pass it on to your designated beneficiaries in the manner you choose. There are many potential objectives, both financial and nonfinancial, to consider in the estate planning process. Because these are likely to evolve over time, it makes sense to review your estate plan periodically.

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Estate and gift planning, done right, evolves over time to reflect your changing goals and circumstances.



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Lifetime gift tax exemption

Give now, in 2013, to save down the line

In 2013 there is a $5,250,000 gift tax exemption; the first $5,250,000 of cumulative lifetime gifts is exempt from gift tax. The gift tax exemption amount used during a lifetime is subtracted from the estate tax exemption amount available upon death.

 


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Annual tuition exclusion

A nontaxing way to play fairy godmother: Paying for college

Over time, an annual giving program can remove hundreds of thousands of dollars from your estate on a tax-free basis. You can give individual gifts of up to $14,000 ($28,000 if you’re married and your spouse joins in the gift) to any number of people annually without having to pay a gift tax. There is also an unlimited gift and GST tax exclusion for any tuition paid directly to a school on someone else’s behalf.

 
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Estate tax savings GRAT

GRAT gratification: How one business owner achieves substantial estate tax savings

To transfer the future appreciation of an asset to beneficiaries without giving up the current value of the asset (plus a fixed annual interest payment), consider transferring the asset to a grantor retained annuity trust (GRAT). GRATs work best with assets that are likely to appreciate rapidly and when interest rates are low. It might be wise to consider a GRAT sooner rather than later because Congress has discussed new legislation that would make the GRAT less beneficial.


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