I wish you all a holiday season filled with peace, joy and happiness. As we approach the end of the calendar year, most of us inevitably look back on what we have accomplished this year, and what remains undone. Here are a few items to consider;
1. Last Will and Testaments and Trusts– If you have a Last Will and Testament or a Trust, you should review the documents every few years. You may have bequeathed specific property that has since been sold or exchanged. You may wish to change your beneficiaries, or the amount or percentage given to each beneficiary. Someone in your family or a close friend named as an executor, successor executor, trustee or guardian may have passed on or relocated. There may be changes to you or your family’s health, requiring amendments or additional documents to accommodate the changes.
2. Power of Attorney and Health Care Proxy– The same questions would apply regarding individuals named to act as either your agent under a Power of Attorney or your health care agent under a Health Care Proxy. It is important you name someone who is able and willing to act for you, and preferably also name a successor in each document.
3. Lifetime Gifts– Gifting has become a preferred method of estate planning under the current federal estate and gift tax laws. Since lifetime taxable gifts are added back to New York estate tax returns at a lower rate than if the property was passed through a taxable estate, gifting can be an excellent planning tool for many individuals. In 2013 and 2014, the annual gift tax exclusion is $14,000.00. What that means to you is you may give away $14,000.00 to an individual (or several individuals) without filing a gift tax return and without any gift tax.
4. Estate Tax– New York State has an estate tax that applies to taxable estates of $1,000,000.00 and above. However, there may be a recommendation this year to increase our state estate tax exemption from one to three million dollars. This would benefit many of our state’s middle class residents, as their estate would then be exempt from filing and paying a state and federal estate tax. The federal estate tax applies to estate with $5,250,000.00 to $5,340,000.00 for 2014. That is the amount an individual can give away in lifetime gifts