Timing Your Estate Planning
Couples can give up to $26,000 per year without incurring any gift taxes. Singles are allowed up to $13,000 per year.
Because the federal estate tax exclusion is $3.5 million this year, taxes are not a concern for many people. A bigger concern is if your assets will be enough to last for the rest of your life. If you are a 65-year-old retiree and estimate you will need to draw $60,000 (adjusted for inflation) from your investments to maintain your standard of living, you will need about $1.5 set aside for yourself.
To hedge against the likely possibility that Congress will lower the federal estate tax exclusion, possibly as low as $1 million, gifting now will achieve that result. Now is an ideal time to give gifts of depreciated stock. For example, if you own American Express stock which sold for over $60 in June of 2007 and today sells for $25, you can give more than twice as much American Express stock today without triggering a gift tax as you could two years ago.
Lawyers at a law firm concentrating in the area of estate planning can answer questions and provide additional information regarding these matters.
