By Brendan Daly
The Senate recently introduced two bills that include proposed changes to the federal estate tax laws. The reason? To raise revenue due to the pandemic relief and infrastructure packages. These bills will have a significant impact on future estate planning, and may also disrupt existing plans with the increased risk of estate tax exposure.
The two bills currently under consideration are:
Gifting money is a nice thing to do for a friend or family member, but—as the saying goes—no good deed goes unpunished. If you’re not careful, your gift could turn out to be subject to the federal gift tax of up to 40%.
In part one of this series, we covered the annual and lifetime exclusions as well as lifetime exclusion on the first $12.06 million of your estate. We also talked briefly about the Connecticut state gift tax—the only one in the country—and which kinds of gifts are exempt from the tax.
In this second part of the series, we’re going to look at which kinds of gifts are subject to the gift tax, including gifts to minors.
Wolters Kluwer came out with their annual inflation adjustment projections which reflect several increased thresholds and ceilings you should be aware of. The IRS is expected to release the official amount later this year.
Of particular note:
1) The trust and estate maximum income tax bracket (37%) is reached at $12,750, up from $12,500.
The main purpose of the federal gift tax is to keep people from avoiding paying the federal estate tax by simply giving away all their money before they die.
The basics of the gift tax are as follows:
Let’s set the stage. You are a professional service provider and are concerned about professional liability exposure. Or you are engaged in a business that is high risk and you are worried about being sued.
So your lawyer said put all your assets in your spouse’s name.
Well, that generally works. But the solution creates its own problem, which is shown by the following example of a married couple. Continue reading
Well, well, well, what do you know. Congress once again might tinker with the estate tax.
This is something they are wont to do with new administrations and when certain legislators want to make a statement.
Given the recently failed “repeal and replace” of the Affordable Care Act and what appears to be President Trump’s next focus—income tax reform—it is hard to tell whether estate tax concerns will get sufficient attention for any legislative changes. Or whether sufficient votes could be mustered for any changes to the estate tax. Continue reading
I just read a lot of detail on the Governor’s proposed budget that he released this week. In the midst of the drastic news about expenditure cut, there was actually some good news.
The Governor is proposing to increase Connecticut’s gift tax and estate tax exemption to be at the same level as the federal government’s.
Currently the Connecticut exemption amount is $2.0 million and the federal exemption is $5.49 million. The increase in
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