January 1, 2016

A shift has taken place in estate planning from saving on a state tax to avoiding capital gains taxes. With the federal estate tax exemption having been established at $5 million and now increase to $5.43 million per individual, it means that with portability, many spouses now are looking at a tax threshold of nearly $11 million and need not greatly worry. Only 0.12% of estates are likely to be taxed. 

This doesn’t mean that you should avoid important planning opportunities however, as you can benefit from thinking ahead and putting in place various strategies and tools to help maximize what you leave behind to your heirs.

The shift in estate planning is now going from transferring assets during lifetime to doing so at death and this helps to erase capital gains taxes. Distribution from a trust can allow beneficiaries to pay income taxes on individual lower bracket rates.