Taking Advantage of Current Estate Tax Breaks

December is a busy time for almost anyone.  Amidst the hustle and bustle, do not forget to take advantage of the current tax breaks offered under estate and gift planning laws.  If you miss these opportunities, they may not present themselves again.

One of the last tax breaks in the estate and gift tax system is your right to make gifts of $14,000 to any number of donees free of transfer tax this year.  In making these gifts, you are able to reduce your estate and avoid death taxes. 

If you make gifts in excess of the annual exclusion amounts, you will use some of your lifetime unified estate and gift tax exemption.  Yet, the sooner you use it, the more income and appreciation that will pass tax-free to your family in the future.  This is particularly true as the stock market continues to soar. 

If you are not comfortable in making gifts of $14,000 or of your $5.34 million exemption, you can put the gifts into a Crummey Trust instead.  A Crummey Trust (Gift Trust) can be designed so that you can take advantage of your annual exclusion gifts and still leave your family with access and control.  If your family needs access to the trust funds, the trust income and assets are available.  But if your family does not need them, they remain sheltered and grow. 

See John S. Lueken, How To Get The Most Out Of Your Year-End Gift And Estate Tax Planning, Bingham Greenebaum Doll, Dec. 15, 2014.