Now is a Great Time to Gift
The changes to the federal estate tax laws on January 1, 2011, include a wonderful opportunity to gift away a portion of your estate without incurring gift taxes. Along with the increase in the federal estate tax exemption limit to $5 million per person, Congress increased the gift tax exemption limit to $5 million per person. The previous limit was $1 million per person. The annual exemption limit remains $13,000 per person, however, you may now give away up to $5 million of your estate while you are alive without paying any gift tax. Any gifts made in excess of this amount would incur tax at the newly reduced rate of 35%. Adding to the benefits of implementing a gifting strategy, Washington State does not currently have a gift tax. One caveat, this opportunity may not last. The current estate and gift tax laws are set to expire at the end of 2012.
