Tuesday, May 10, 2011

Make the Most of the 2010 Tax Relief Act

Are you taking full advantage of the 2010 Tax Relief Act? The Act was passed into law in an effort to aid our economic recovery—and there are provisions that have a major impact on estate planning. As it stands, the relevant benefits of the Act are slated to disappear in 2013—meaning that in order to take advantage, estate planners must act this year or take their chances, later.

What does the Act mean to your estate planning? Specifically, the level of exemption for gifts is increased from one million dollars up to five million for individuals and ten million dollars for married couples. In other words, it is possible for benefactors to transfer up to five million dollars to beneficiaries before the gift becomes subject to the gift tax. This increased exemption level represents a great opportunity to create trusts that will benefit future generations. This exemption is “portable”—which means that the exemption can be passed to a surviving spouse, possibly making complicated “bypass planning” unnecessary.

While there are a number of benefits that apply to all taxpayers, the tax benefits in the 2010 Tax Relief Act can be very valuable for couples and individuals that are in the midst of estate planning. It’s debatable if the exemption will be reduced all the way back down to one million dollars in 2013. Remember, the tax code has always been subject to the whims of politicians. In a presidential election year, the world of politics can be even more contentious than usual. So, if you could benefit from the increased exemption level, it is wise to act now before it is too late.

It is important to recognize that each individual situation is different—you should always consult with an expert who can help you make the best decision for your future. Please contact The Chuck Oliver Team at (800) 825-1766 or email millie@thechuckoliverteam.com to set a time to discuss your situation. We can help you determine how to make the most out of the 2010 Tax Relief Act.