The amount that you can give to someone without having to pay the federal gift tax has been increased to $13,000 a year, effective for 2009. The previous maximum was $12,000 a year. Many people will want to take advantage of this new limit to increase their annual giving as part of their estate plan. The limit is the amount that any one person can give to any other person. So for instance, if a married

Starting in 2009, you can leave $3.5 million to your heirs before the federal estate tax kicks in – up from $2 million previously. And in 2010, the estate tax is slated to be repealed altogether. But contrary to what some people think, that doesn’t mean you don’t need to worry about estate planning!

If you’ve been wondering how a family limited partnership can save your family taxes, here’s a good example.  Bianca Gross was a widow who invested in stocks.  She had two daughters.  She decided to create a family limited partnership, in part so she could involve her daughters in her investment decisions and teach them about investing.  Bianca became the general partner, and the daughters became limited partners.  Bianca had complete management control over the partnership, and

You might think it’s easy to leave a vacation home to your children in your will.  But there are many issues that can arise.  For instance, over time children might squabble over who will pay for major repairs or renovations, especially if some children use the property more than others.  Children might disagree about whether to sell the property.  And there are tax, liability and asset protection issues and opportunities as well. If you haven’t thought

Many people like the idea of pre-paid funeral plans because they allow funeral services to be locked in at today’s prices, and save family members the trouble of selecting caskets and attending to other matters at a time of great sadness and stress.  But if you’re thinking of such a plan, be cautious.  After you’ve paid, there’s always a risk the funeral home will go out of business, or the owner (or a new owner) will

Can you put property into a trust, but keep the power to take it back again as long as you substitute other property of equal value?  Yes in some cases, according to an IRS ruling. This means you could put real estate, artwork, an insurance policy or other property into a trust, and keep the power to take it back for yourself, as long as you’re willing to pay the fair market value of it to

If you plan to leave a house, car, business, or other property to one of your heirs, and the property is subject to a mortgage or other debt, do you want o leave it with the debt? Or do you want the debt to be paid off from your other assets so the person receives the property debt free? Surprisingly, many people don’t think about this question when they write their will.  But it can have

A trust can’t deduct on its tax return the entire amount it spends for investment advice – at least in most cases, the U.S. Supreme Court has decided. The case involved a trustee who paid $22,000 for investment advice.  He tried to deduct this amount from the $625,000 in income the trust reported on its tax return. For an individual, investment advisory expenses are a “miscellaneous itemized deduction” and they can be deducted only to the

With the cost of education skyrocketing, many people want to contribute to their grandchildren’s tuition costs.  A variety of ways are available to do this, which also have estate-planning benefits. All these ideas apply not just to grandchildren but to grandnieces, grandnephews, great-grandchildren and others. The simplest solution is for grandparents to pay the tuition costs directly.  Not only does this provide a benefit to the grandkids, but it also gets assets out of the grandparents’

A family-owned limited liability company saved a family $14 million in taxes, in the latest ruling from the U.S Tax Court on this technique.  With a family LLC, parents create a company and fund it with valuable assets.  Then they give their children ownership interests in the LLC.  Giving these interests triggers less gift tax than giving the underlying assets, because they are “worth” less on the open market.  That’s because outside investors would be reluctant