Estate Tax Exclusion: How Much Can Pass Tax-Free?

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Estate Tax Exclusion
How Much Can Pass Tax-Free?
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Federal Estate Tax
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When you are planning your estate you must
inventory your assets
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Of course you need to know what you have to give
to your loved ones
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However, there is another major concern
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You must determine if you have any ESTATE TAX
EXPOSURE
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Some of the Details
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The entirety of your estate is not subject to the
federal estate tax
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There is an exclusion or credit
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In 2013 the amount of this exclusion is 5.25
million
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You can transfer this amount before the tax
becomes applicable
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The federal estate tax carries a 40 percent
maximum rate
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Unified Transfer Taxes
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When you hear about the estate tax a light bulb
may go on in your head
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• You could just give assets away while you are
  alive to avoid the tax, right?

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• The answer is a
• resounding NO

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• There is a gift tax in place
• that is unified with the estate tax

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It carries the same rate, and the exclusion
applies to the combination of gifts that you
give coupled with the value of your estate
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Annual
Gift Tax Exclusion
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There is no tax advantage gained by giving
tax-free gifts using your unified 5.25 million
exclusion
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However, there is an annual gift tax exclusion
that exists apart from the unified exclusion
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You can give as much as 14,000 annually to any
number of gift recipients FREE OF THE GIFT TAX
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You could give a tax-free gift to an individual
in a given year that exceeds this amount, but you
would be using a portion of your unified exclusion
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Married Couples
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The 5.25 million unified exclusion is allotted
to each taxpayer
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As a result, a married couple would have a total
of 10.5 million
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The estate tax exclusion is portable
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• This means that you could use the exclusion that
  your deceased spouse was entitled to in addition
  to your own

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Tax
Efficiency Strategies
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If your assets exceed 5.25 million in total
value, you can explore TRANSFER TAX EFFICIENCY
STRATEGIES
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• You don't necessarily have to pay
• taxes on every penny that you transfer that
  exceeds this amount

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The key is to plan ahead proactively with the
assistance of a licensed estate planning attorney
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RALEIGH-DURHAM WEALTH PRESERVATION CONSULTATION
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High net worth individuals must take action to
preserve their wealth
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The estate tax can take a toll, but you can
mitigate your exposure
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If you would like to discuss wealth preservation
with a licensed attorney, contact our firm to
schedule A FREE CONSULTATION
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