If you were to enjoy amazing monetary success among the first things that might cross your mind would be to share the wealth with your liked ones. While kindness is almost generally considered as a favorable trait, you would succeed to think about the tax code prior to you divest yourself of any significant amount of resources.
There is a gift tax in place, and it is combined with the estate tax. There is a unified exemption that stands at $5.12 million right now. This implies that the very first $5.12 countless any gifts that you offer throughout your life coupled with your estate as it is being passed to your successors can be transferred tax-free. The rest goes through a 35% tax.
It should be noted that these figures are going to change for the worse in 2013 if we do not see any legal measures passed to modify the existing laws. At that time the maximum rate will be hiked to 55% and the exemption will be shaved down to $1 million.
The point is that if you were to give $1 million in presents to your loved ones after the unified exclusion is minimized 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 performance in mind. If you would like to have a professional examine your situation and make the suitable suggestions, take action right now to arrange for a consultation with a great Somerset County NJ estate planning lawyer.