Up to the Minute News - updated Tuesday, January 2, 2013
Late in the evening on New Year's Day, January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012. The law retained the $5 Million exemption for estate taxes, gift taxes, and generation skipping taxes. The tax rate for gifts and bequests in excess of the exemption was increased to 40%.
One change that will probably affect many estate plans is that Congress made permanent for married couples a provision that allows portability of unused estate and gift tax exclusion between spouses. This provision was added to the law at the end of 2010 and took effect in 2011 and 2012 on a temporary basis. Briefly stated, it allows a married couple to combine their $5 Million exemptions to make a total of $10 Million, and in some cases will allow spouses to eliminate the multiple trust schenario that has become common in estate plans for married couples.
We will be notifiying all of our clients in the coming days about these changes and will include our recommendations for updating estate plans to most efficiently plan for transfer of wealth to the next generation.
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Protect Yourself, Your Family and Your Assets
To provide for your family and protect your assets, a comprehensive estate plan is essential. An estate plan allows you to distribute assets to people or organizations, avoid or minimize estate tax, choose who will manage your property and finances if you are incapacitated, choose who will make health care decisions if you are incapacitated and protect your business.
Price, Crooke, Gary & Hammers, Inc., provides sophisticated estate planning assistance for people with a high net worth as well as those with more modest assets. Attorney Bruce J. Gary is certified by the State Bar of California Board of Legal Specialization as a specialist in estate planning, trust and probate law. Please call 949-261-2233 or contact us online to schedule an appointment with an Irvine estate planning attorney.
Estate Planning Basics
Regardless of income or assets, every adult should have the following documents:
- Revocable living trust
- Durable powers of attorney
- Advance health care directive
- Health care powers of attorney
One of the primary goals of estate planning is to have documents in place to avoid probate. We recommend that most people create a revocable trust to shield their assets from taxes. Anyone who owns a home or has more than $100,000 in assets needs a revocable trust to avoid probate, such as:
- ABC trusts/AB trusts
- QTIP trusts
- Survivor's trusts
- Decedent's trusts
- Exemption trusts
- Bypass trusts
- Testamentary trusts
- QNEC trusts
- GST trusts
- Exempt trusts
- Non-exempt trusts
Irrevocable trusts are different. They are meant for more sophisticated uses such as life insurance, gifts to children or grandchildren, asset protection from creditors and charitable gifts. The firm can assist you with the creation of any type of trust, including:
- Special needs trusts
- Pet trusts
- Art trusts
- Charitable trusts/charitable remainder trusts/charitable lead trusts
In addition to trust creation, we provide probate and trust litigation when disputes arise. We can also assist you with conservatorships and guardianships, representing you at hearings and litigating any disputes.
Contact an Orange County Estate Planning and Probate Attorney
To consult with one of our lawyers, please call 949-261-2233.