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    Nov 8 12

    Annual Gift Exclusion Gets a Friendly Bump for Newport Beach Families

    Newport Beach Law Firm

    Individuals
    can generally receive up to $13,000 a year as a gift without getting hit by a
    federal gift tax. In 2013, as a result of cumulative indexing, this amount is
    projected to increase to $14,000 per person.

    Gold Gift BoxSometimes it’s the little
    things, and in this case the little updates to the tax code that are worth
    celebrating. If you haven’t heard already, the annual gift tax exemption will
    jump from $13, 000 to $14,000 per year per person starting in 2013.

    This increase has been a small
    victory heralded by the financial press, included in a recent CBS MoneyWatch article titled “Gift-tax limits to rise in 2013.

    Now, the extra $1,000 may not
    sound like much if you haven’t been making full use of your gift limits.
    Nevertheless, when it comes to tax advantage wealth transfers, every little bit
    helps.

    In fact, annual giving to loved
    ones is a time-honored tradition and strategy. Every portion of your estate
    given removes that much from coming under the estate tax scythe at your death.
    Remember: beginning in 2013 you can transfer $14,000 per year per
    person
    , to as many persons as you see fit, without reducing your
    lifetime exclusion (currently $5.12 million, but we’ll see what comes of that
    in 2013).

    In addition, these gifts don’t
    count as charitable gifts either, which are without limit and can provide
    significant tax deductions when done correctly. If you are looking for even
    more ways to maximize your wealth transfers through gifting, then consult the
    original article. For example, two very specific and useful suggestions are to
    make gifts to cover educational costs (i.e., tuition) or medical costs.

    Gifting is such a powerful
    wealth transfer method, and any small victory (even a $1,000 increase in the
    annual gift exclusion) is worthy of attention and consideration.

    Contact your Newport Beach
    estate planning attorneys at Meier Law Firm to discuss all of your estate
    planning needs
    .

    Reference: CBS MoneyWatch
    (October 10, 2012) “Gift-tax
    limits to rise in 2013




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