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December 3, 2012
Filed under: Business Planning,Estate Taxes and Lifetime Gifts,Federal Estate Tax,Living Trust — Tags: "Bloomfield Hills", "Bush Laws", "Congress", "Death Tax", "Estate Planning", "Federal Estate Tax", "Lifetime Gift", "Living Trust", "Marc Wander", "Michigan Estate Planning Lawyer Blog", "Oakland County", "Obama Administration", "Tax Reform", "Wealthy", "Witzke Berry Carter & Wander", Michigan — Christopher J. Berry @ 3:43 pm
Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning. Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander
December 2, 2012
Filed under: Estate Planning,Estate Taxes and Lifetime Gifts — Tags: "Asset Protection", "Bloomfield Hills", "Congress", "Estate Planning", "Estate Tax", "Fiscal Cliff", "Lifetime Gift Exemption", "Marc Wander", "Michigan Estate Planning Lawyer Blog", "Witzke Berry Carter & Wander", southfield — Christopher J. Berry @ 4:15 pm
Preparing for the “fiscal cliff” deadline, a widow with $4 million in disposable assets is inquiring how to give away a sizable portion of her fortune as soon as possible. With the tax hikes fast approaching, the Chicago-area millionaire wanted to vacate the money from her accounts by the end of the year so the federal government could not take a giant bite out of it in the form of estate taxes.
With the $5 million exemption on estate taxes and lifetime gifts set to evaporate on Dec. 31, lawyers and financial planners are scrambling across the country to ease client’s concerns. Without a consensus in Congress, the tax rate on estates and lifetime gifts will rise from 35 to 55 percent. Even more of a concern is the amount of money exposed to the tax: Currently the tax rates only apply to estate more than $5 millions. The end of the Bush tax cuts would reduce this exemption to $1 million.
(Read more: 8 Life Stages of Estate Planning: Part 1)
An average American can have 1 or 2, or even 3 million dollars and not be wealthy, which is why many financial planners believe that the estate tax and the lifetime gift exemption will be reset closer to $3 million. And since spouses have the ability to give away an amount up to the exemption without incurring taxes, the exemption for a married couple would be $6 million.
“It’s a relatively small group of people who really need to worry now,” said Michael S. Beriss, a former tax attorney who is now a financial planner with Ameriprise. To take full advantage of the current $5 million exemption, a married couple would have to have a spare $10 million in the bank. “If you give away $1 million today, you’re not using your $5 million exemption,” he said.
(Read more: 8 Life Stages of Estate Planning: Part 2)
An older investor with investable assets and a home worth more than $3 million should not panic, rather, do some planning. Consider what you are trying to accomplish, and the legacy you would like to leave. The legacy you envision will determine the type of tax relief you choose.
If you want to send your grandchildren to college, a 529 college fund is the best solution; if you want to support your a cause that is close to your heart, a charitable contribution may be the best way to protect your money.Trusts may be the smartest answer if your main objective is to make your kids’ lives easier financially without leaving them with tax headaches themselves.
(Read more: Who Needs a Living Together Contract?)
However, a money-minded taxpayer may simply desire to pay as little a percentage in tax possible, to preserve their cash legacy and keep the government’s hand off it. For these savers, even the worst case scenario – a return to the 55 percent tax on any amount greater than $1 million – is a salvageable situation. Estate tax, said Beriss, “is probably one of the holiest areas in tax code, and I don’t mean it in the religious sense.”
Read more:
http://finance.yahoo.com/news/estate-tax-going-people-arent-193631304.html
Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning. Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander
October 2, 2012
Filed under: Estate Planning,Federal Estate Tax — Tags: "Business Law and Commercial Transactions group", "Congress", "Democrats", "Estate Tax Law Expirations", "GOP", "Michael P. Witzke", "Portable", "Public Policy", "Spousal Exclusion", "Witzke Berry Carter & Wander", estate administration, estate planning, Michigan — Christopher J. Berry @ 10:30 pm
Among the plethora of Bush era tax cut and sequester debates, Congress must also address the expiration of the current estate tax law before the year’s end. As it stands, the federal estate tax exemption is set at $5.12 million and estates valued over this amount will be taxed at 35 percent. If no action is taken by Congress, the exemption will revert to $1 million and the estate tax rate will be 55 percent in 2013. It is estimated that 52,500 estates will be affected in the event Congress fails to act.
Business and farm lobbyists are fighting to rein in the estate tax, with many hoping to have the tax eliminated. In a full-force effort, they are trying to persuade Congress that resources needed for investment are being drained due to the constant changes in the estate tax rate, in recent years.
The GOP agrees, on the basis that decreasing the exemption and raising taxes on job creators in this economy rivals common sense. On the flipside, many Democrats repeatedly assert that in order to cut the deficit, the estate tax should return to the 2009 levels of a 45 percent rate for estates with a $3.5 million exemption.
Long-term and estate planning is subject to dramatic fluctuation if the estate tax plan expires without action. Currently, the federal unused spousal exclusion is portable, meaning, if one spouse dies and does not use all of the exclusion, the surviving spouse can combine the remaining amount with his or her exclusion. Also at risk of expiration, is the portability of the federal spousal exclusion in the event that the estate tax sunsets.
Witzke, Berry, Carter & Wander PLLC is keeping a close eye on the ongoing debates and how any estate tax decisions may affect you and your clients.
Mr. Witzke practices in the areas of estate and gift tax planning, financial planning, retirement planning, charitable giving, elder law, and small business planning. He focuses on helping clients grow, protect, and transfer wealth efficiently. Mr. Witzke is a past president and board member of the Financial Planning Association of Michigan, a member of the board of directors for Leadership Oakland, and a member of the planned giving advisory committees of Wayne State University and the Community House in Birmingham. Follow Mr. Witzke on Twitter @gr8estatelawyer.
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