National Estate Planning Awareness Week
In the words of Woody Allen, "I'm not afraid of death; I just don't want to be there when it happens." Woody Allen's attitude explains how many feel about "estate planning"- I don't care about it because I won't be there when the time comes!
Regardless of Woody Allen's attitude, you are probably just as shocked and enthused as we were to learn that this week is "National Estate Planning Awareness Week." I can hear it now, at the local bridge club, your church group, PTA meetings, sporting events, the national news (maybe the Presidential debate?), "Did YOU know that it is National Estate Planning Awareness Week?" Imagine the responses - Oh my goodness, how did you find out? Did my notification go to my junk mailbox? Is it too late to celebrate? Should I call Carlson Burnett?
Who came up with the Cracker Jack idea for National Estate Planning Awareness Week? I'm guessing a government bureaucrat or an administrator at AARP. Nevertheless, we at Carlson Burnett will not let this week pass by without celebration and fan fare! Each day this week we will post an Estate Planning Tip to memorialize this historic annual event.
Monday's Tip of the Day
If your current net worth (whether an individual or married couple) is more than $2 million, then consult an estate planning attorney about taking advantage of the $5.0 million gift tax exemption that expires at yearend.
In 2012, the gift and estate tax exemption of $5 million will be reduced to $1.0 million. If you have more than $1 million in assets and die after 2012, then only $1 million will be exempt per person. The remainder of your estate would be subject to an estate tax rate that tops out at 55%. If you have more than $1 million in net worth and are willing to "gift" some away in 2012, then the entire 2012 gift will be exempt from gift and estate taxes (up to $5.0 million per person, $10.0 million per married couple). Thus, gifting in 2012 can potentially save millions from being taxed at the 55% tax rate. If you want to leave as much of your estate as possible to your family, then act now because the window for the 2012 exemption is closing fast!
"There's no consequences for gifting $13,000 a year to someone."
While there are no gift taxes on the first $13,000 gifted per person per year, these gifts do impact Medicaid eligibility. Medicaid still considers any gifts made 5 years before your application date as your asset.