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What the 2015 Estate, Gift, & GST Tax Update Could Mean for Your Estate Plan

Estate and gift taxes can have a rather large impact on your assets, which ultimately have an impact on your estate plan. If you currently have an estate plan, then you're one step ahead of the game. But laws are always changing and it is vital that your estate plan regularly changes with them.

The IRS recently announced updates to inflation which are effective immediately for 2015.

These adjustments include:

  • Estate tax exemption: Increase from $5.34 million to $5.43 million
  • Lifetime gift tax exemption: Increase from $5.34 million to $5.43 million
  • Generation-skipping transfer (GST) tax exemption: Increase from $5.34 million to $5.43 million
  • Annual gift tax exclusion: $14,000

The top gift tax rate for each category will remain at 40 percent. So what does this mean for your estate plan? Keep reading to learn how you might be affected in 2015.

Your Estate Plan & the New Year

One of the most valuable things that these adjustments could do for you is give you the ability to make even larger lifetime gifts and avoid unnecessary estate taxes by way of portability. Portability means that a deceased spouse's unused estate and gift tax exemption can be used by the surviving spouse.

Essentially, you have the ability to leave your heirs with even more money. Federal estate taxes can be high, but by applying portability, your assets are protected from a hefty loss.

The gift tax annual exclusion amount will stay the same in 2015 - $14,000 for individual gifts and $28,000 for gifts made by married couples, should they consent to split their rights.

Make the most of your assets by gifting securities or interests in privately-held companies, rather than shelling out cash gifts. Doing so may even raise the value of your assets and further benefit your heirs and beneficiaries.

Questions? Don't hesitate to call!

Understanding how these changes directly affect your estate plan can be confusing, which is why our firm exists. When you partner with The Woodbury Law Office, you have free reign to voice your concerns and we will work together to find a solution you feel comfortable with.

Don't let this New Year get away from you. Call our Sacramento estate planning attorney today to schedule your free consultation!

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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.