Federal estate and gift taxes might be categorized as “much ado about nothing.” Despite all the publicity and earnings from the IRS, fewer and fewer estates will need to be concerned with it. The first $5.34 million of an estate is tax-free (twice that for married couples) in 2014; only taxable estates larger than these amounts need worry about paying the flat rate tax of 40%.
If you are in the neighborhood of the amount of wealth which may approach or surpass the taxable level, you can reduce the estate taxes by giving away some of your assets before you die. The limit is $14,000 a year, and you may give this amount to as many recipients as you want without reducing your lifetime exemption.
The annual limit for married couples is $28,000 per recipient, even if only one spouse is the source of all the funds. However, when one spouse “funds” the entire $28,000 gift, a gift tax return will need to be filed and “gift splitting” elected on the return.
See if there are other things in the original article that could impact your estate by speaking to an experienced estate planning attorney. He or she will have the know-how to put you in the right strategy to accomplish your objectives and enjoy your wealth without worries.
