Looking Forward To The New Year In Estate Planning

One reason that estate planning can be so complicated without help is that the rules can change yearly. It is also easy to miss things, which can make it vital to have someone knowledgeable look over any documents like wills or trusts. Here is a bit of estate tax information that you may need to know for 2016.

New Lifetime Exclusion Amount

To receive tax benefits while gifting your heirs, a unified gift and estate tax credit lets you transfer property or gifts while you are alive. The lifetime exclusion amount that one can give without taxes applying is $5.45 million for 2016 as this number is adjusted for inflation every year. This gives a benefactor tax benefits, but estate planning documents are still needed to ensure that beneficiaries receive what one wants them to have when passing away.

Remember, Texas has its own rules for gifts and estate taxes. You might need a Texas attorney when making decisions regarding your estate to ensure your documents comply with all federal and state laws.

Yearly Gift Giving

You are allowed to give some gifts before the lifetime exclusion amount applies. The amount one can give annually stays the same this year at $14,000, and there is no limit to how many people this amount can be divided between. If you plan to give gifts this year, make a note of exceptions. For example, annual limits are not applicable for spouses.

Giving As A Couple

In 2016, couples have a lifetime exclusion amount of $10.9 million. This is because portability rules allow a surviving spouse to get a deceased spouse’s unused lifetime exclusion amount.

If you have questions about estate planning or want to make sure your documents are valid, contact us today.