Do I need a probate attorney?
  1. Home
  2.  » 
  3. Estate Planning
  4.  » GST and Estate Planning Tips

GST and Estate Planning Tips

On Behalf of | May 1, 2015 | Estate Planning

Making an estate plan in California requires understanding of both federal and state laws regarding gifts and taxes. It is very important that those who create an estate plan have a full understanding of the implications of any particular decision to save, move or bequeath funds. Estate planning is best handled with the help of a professional who understands the numerous laws at the federal and state level that can impact how estate funds are handled.

Making good estate plans requires a deep understanding of the tax laws surrounding bequests. For example, generation-skipping transfer tax is imposed when money or property is bequeathed to grandchildren or more remote relatives than a spouse or child. GST is levied in addition to other taxes, so it is very important to know if a certain bequest will incur this tax.

Gift, estate and GST tax exemptions totaled $5 million as of 2011 but were indexed to account for inflation. In 2012, the exemption rose to $5.12 million; in 2013, the total rose to $5.25 million; in 2014, the exemption total was $5.34 million; and the total will be $5.43 million for 2015. This means that as of this year an individual can transfer property with a total value of $5.43 without paying transfer tax, either before or after death. However, any exemption used during the individual’s lifetime will be taken off the total exemption amount.

For help in drawing up a will or power of attorney, planning for taxes and sheltering property through trusts, an attorney with experience in handling estate planning can be an invaluable resource. With the help of an estate planning lawyer, individuals may be able to avoid some of the taxes and fees associated with passing property through an estate.

Archives

FindLaw Network