Gift tax deadlines warrant creative estate planning

California residents, especially readers of this blog, are well-aware of the impending changes to the gift tax and the estate tax that will take place unless Congress acts quickly to pass new legislation before next year.

For people with sizeable assets, families with children and anyone else hoping to pass as many assets as possible to their beneficiaries without significant federal taxation, now is the time to take immediate action to organize and enact their estate plan so as to avoid these potentially high tax bills

With time quickly running out, estate planning attorneys and accountants are now basically swamped with requests of those wanting to act now before tax rates increase and tax-free estate amounts are slashed from over $5 million to $1 million. Additionally, the highest tax rate will jump from 35% to 55%, which can mean millions out-of-pocket in taxes for those with an estate that was previously tax-free.

Many people are turning to trusts as the mechanism to take advantage of the gift and estate tax breaks before they expire. Certain trusts can especially benefit those who want to transfer assets, but who are concerned about keeping enough assets to live on during their lives.

One such trust is known as a grantor retained annuity trust, or GRAT, which pays the donor in installments over a period of time before the balance is transferred to the beneficiary at a set date. Another similar trust, called a qualified personal residence trust, or QPERT, deals with real estate gifts. The QPERT can allow a person to remain in his or her home or property for a number of years before it is eventually transferred to the beneficiary outright.

Those who want to play it safe but still take advantage of these fleeting tax breaks should prepare to take the appropriate action for their situations immediately, before time runs out and taxes skyrocket.

Source: Fox 6 WBRC, "Coming changes in estate, gift taxes stir 'frenzy'," Dave Carpenter, Oct. 24, 2012


Its like you read my mind! You seem to know so much about
this, like you wrote the book in it or something.
I think that you could do with a few pics to drive the message home a
bit, but instead of that, this is wonderful blog. An excellent read.
I'll definitely be back.

Admiring the time and effort you put into your blog and detailed information you present.
It's awesome to come across a blog every once in a while that isn't the same unwanted rehashed information.
Fantastic read! I've bookmarked your site and I'm including your RSS
feeds to my Google account.

You will continually seem to discover inferior web sites, and yet I was lucky to
locate the one you have. Great work.

Leave a comment
Comment Information

Contact Our Law Office Today

If you would like to discuss representation or have another question about my firm, please call 916-248-4465 or email my Sacramento, California, office to arrange for a consultation.

Office Location
901 H Street, Suite 210
Sacramento, CA 95814-1808

Phone: 916-248-4465
Fax: 916-441-5776
Map & Directions

office numbers