If you were to take pleasure in remarkable monetary success one of the first things that may cross your mind would be to share the wealth with your liked ones. While generosity is nearly widely deemed a positive characteristic, you would succeed to consider the tax code prior to you divest yourself of any substantial quantity of resources.
There is a gift tax in location, and it is merged with the estate tax. There is a unified exemption that stands at $5.12 million right now. This implies that the first $5.12 countless any presents that you offer during your life coupled with your estate as it is being passed to your heirs can be moved tax-free. The rest goes through a 35% tax.
It need to be noted that these figures are going to change for the worse in 2013 if we do not see any legislative procedures passed to change the existing laws. At that time the maximum rate will be hiked to 55% and the exclusion will be shaved down to $1 million.
The point is that if you were to offer $1 million in presents to your liked ones after the unified exemption is reduced to $1 million all of your estate would go through the estate tax.
That is, unless you are proactive about crafting your tradition with tax effectiveness in mind. If you wish to have an expert evaluate your situation and make the proper recommendations, act right now to arrange for a consultation with a good Somerset County NJ estate planning attorney.