December 17, 2013 /24-7PressRelease/
-- As the holidays swiftly approach -- and just as swiftly, will depart -- warm thoughts of family gatherings combine with other year-end considerations. While, for some, the joy of the season is overshadowed by thoughts of wrapping up the calendar year for tax purposes, the combination of the two may provide a great opportunity to discuss your estate planning
desires with your family.
Many wealth transfers to younger generations fail because families do not properly prepare recipients for the handoff. Numerous tax law changes in the coming year may be just the incentive you need to conduct a family meeting over the holiday festivities.
Upcoming tax changes
Passage of the American Taxpayer Relief Act of 2012 (ATRA) brought about significant changes to estate and gift tax laws
. As of January 1, 2014, some of the changes will go into effect.
Under the ATRA, you may leave an unlimited amount of assets to your spouse and an additional $5.25 million to a non-spouse person or entity, such as a child or a trust. While many may believe this change does not affect them because of the monetary amount, some Californians designed their estate plans to roll all amounts excluded from estate taxation into specially created tax savings trusts
With the newly established thresholds, the entirety of a person's estate may now roll into such a trust. If your estate plan is set up to provide for your spouse outside of a family trust, you may need to revise your plan. While most family trusts integrate tax law changes, if you have not recently reviewed your estate plan, you should reevaluate it soon.
The law changes affect same-sex couples as well as opposite-sex couples because the changes affect transfers to spouses. Additionally, if you provided for a same-sex partner in compliance only with gift tax laws, spousal exemptions may now be more appropriate.
Convey your wishes to family
While few people are comfortable talking about end-of-life plans, it is important to convey your desires while you are able to address questions that may arise and provide the reasons for your decisions.
Every family is different and estate plans can be tailored to your family's specific circumstances. One family member may require special handling due to mental illness or an inability to effectively handle his or her own finances. You may have a child who provided you or your spouse with long-term care during an extended illness and you may wish to provide compensation to that person from the estate. Such special considerations can be explained during a family meeting.
A lawyer can help
If you do not have an estate plan or have not recently reviewed its provisions, consult an experienced estate planning lawyer. A California lawyer knowledgeable about tax, probate and estate issues can help.
Article provided by Law Offices of Connie Yi, PC
Visit us at www.connieyilaw.com