Tax Efficient Giving: Action Required Before End of Year

You have to be ready to take action when it is necessary if you want to preserve your wealth for future generations. With this in mind you may want to take advantage of a unique opportunity that exists for the rest of this year.

The federal estate tax is unified with the gift tax, and there is a combined $5.12 million lifetime exclusion. That is, there is an exemption of this amount in place for the remainder of this year.

When the clock strikes midnight on the last day of December and the New Year is ushered in the unified exclusion will be reduced to just $1 million.

So, you have between now and then to utilize this larger exclusion to give gifts to people who would otherwise be inheriting these resources after your passing.

It should be noted that these gifts do not have to be direct, immediate transfers. When you give shares in a family limited partnership to family members this act is considered to be a taxable gift.

The same thing is true of funding certain types of trusts for the benefit of your loved ones.

You could take advantage of this expanded exclusion by funding a trust or giving shares in a family limited partnership to your heirs during the 2012 calendar year.

If you would like to explore the possibilities in detail don’t hesitate to pick up the phone to set up an informative consultation with an Oklahoma City estate planning lawyer who places an emphasis on wealth preservation for successful families.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday