By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
We have new federal tax laws adopted in early 2013. What does that mean for you?
Some of the tax laws are generous, such as allowing the federal death-tax-free estate to remain at over $5 million. If you are a single person and assets you own, including the death benefit of life insurance, have a value of less than $5 million, there is no federal death tax (officially called an estate tax) to be paid. If you live in Idaho, there is also no Idaho death tax (called an inheritance tax) to be paid. If you are a resident of another state, such as Oregon, there is a state death tax on estates in excess of $1 million.
Some laws are not so generous to the taxpayer. For example, the federal capital gains tax has been raised from 15% to 20%. The result will be 5% more being paid as tax on the sale of an asset that has increased in value.
Estate planning has many facets. For most people tax planning should not be the controlling motivation. The best plans include some or all of the following features.
• Flexibility to address foreseeable changes in the future.
• A team of professionals to share ideas and coordinate plans to meet your goals. This team may include an attorney, certified public accountant, financial planner and insurance agent.
• If you are married, issues to be addressed will include second marriages and asset protection for the surviving spouse.
• Steps to be taken for asset protection.
• Retirement planning so you can live the life you want in retirement.
• Business succession planning to assure a smooth transition that is financially equitable to all the parties.
• Investments that match your goals.
• Creditor protection.
Call your planning professional and start the process so you get the maximum benefit of the new laws.