There is an ever-changing landscape out there and things that take place on an ongoing basis could have a big impact on your legacy. With this in mind, there is a limited opportunity available during 2012 to make significant gifts in a tax-free manner before it may be too late.
The gift tax is unified with the estate tax, and as a result the exemption encompasses both gifts and the value of your estate. Right now, this exclusion is $5.12 million, so you could make gifts equaling this amount without incurring any gift tax liability. (Of course if you did this, the entirety of your estate would be subject to the estate tax at your death since the exclusion is, in fact, unified.)
This unified exclusion of $5.12 million is going to be reduced to just $1 million in 2013 when the tax relief act that was passed back in 2010 expires.
As a result, for these next several months we are afforded a unique gifting opportunity. Though you may not have planned on giving gifts until a later date if at all, the time may be right to reconsider depending upon your unique circumstances.
This is a delicate matter because there could be changes to existing laws as we saw take place back in 2010. However, a lot of people are against tax relief for successful Americans so simply expecting an extension may be overly optimistic thinking.
To explore the possibility of gift giving in 2012 before the parameters change, take action right now to set up an appointment to speak with a good Oklahoma City estate planning lawyer. Your attorney will evaluate your situation, gain an understanding of your wishes, and advise you accordingly.
Larry Parman
Author, President and Founding Attorney
Parman & Easterday
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