Death, Taxes and a Pending Deadline

“In this world nothing can be said to be certain, except death and taxes.”
Benjamin Franklin
In the years since Mr. Franklin penned this notable adage, the question has ironically become, “How can we best avoid the taxes caused by death?”
Gift and estate taxes have been part of the American tax scene for many years. Currently, with proper planning, a couple can pass approximately $10,000,000 of assets to their heirs without incurring additional taxes. This amount can be significantly higher depending on the type of assets and discounts that may be applied. It is also important to remember that, for a number of years prior to 2011, the gift exemption was significantly less than the estate tax exemption.
The $10,000,000 exclusion is set to expire at the end of this year (2012). If nothing changes, the combined exclusion for a married couple will be sharply reduced to approximately $2,000,000 (still requiring proper planning). Further, the current “portability provision,” which gives a surviving spouse the ability to use any unused portion of a dying spouse’s exclusion, will also expire.
At Gray, Gray & Gray we believe that it is important for individuals with significant assets to take advantage of the current gift situation. This is especially true for owners of closely held businesses who may have plans to gift some of their business to their children or grandchildren. Keep in mind, too, that access to gifted assets can be limited through the use of various trusts and classes of equity ownership.
Nobody knows what will happen to the gift or estate tax exemption in the future. It is likely that we will not see any additional changes or modifications until after the election this year or even into next year. That’s why we are emphasizing taking action now, while the gift and estate tax exclusions are still in place.
If you would like to discuss the possibility of gift planning in 2012, please visit our website at or contact our office at (781) 407-0300.

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