Wealth Transfer Taxation

Tips for Planning Your Wealth Transfer at the End of the Year

When it comes to wealth transfer taxation, a little planning can go a long way. The following information covers some tips to help you and your loved ones reduce your wealth transfer taxation liability. If you have any questions about this information or have additional questions of your own, call to speak with a lawyer at the Yee Law Group at 916-927-9001 today.

Make Additional Transfers Tax-Free

Each year, you can take advantage of an inflation-adjusted amount that you may transfer tax-free.

As an example, if you were to use your full gift tax exclusion amount one year, the next year you should be able to transfer additional money without facing the tax because of the inflation rate. In 2017, the inflation-adjusted exemption amount is $5.49 million — just something to keep in mind this year as you do your financial planning.

A wealth transfer taxation professional may give you more information about this and answer any questions you may have.

Take Advantage of Your Exclusion Gifts

Keep in mind that you can give as much as $14,000 ($28,000 for married couples) per person each year without taxation. This is a good way to transfer some wealth, tax-free, to your loved ones as part of their inheritance. Just take the time to talk to them so they understand what they are receiving and why.

If you want to gift property that is not cash, these tips may be helpful with wealth transfer taxation:

  • Gifting property that has a potential for future appreciation may be a good way to reduce potential estate tax.
  • Gifting property that hasn’t appreciated much since you acquired it may reduce the beneficiary’s income tax liability.
  • Avoid gifting property that has declined in fair market value since you acquired it to potentially minimize your own income tax liability.
  • Gifting property earlier on the year may increase the appreciation of the property, which increases the future value.
  • Take advantage of grantor retained annuity trusts (GRATs) when interest rates are low.

Because tax regulations and laws can change without much notice, it is important to stay up-to-date with current regulations and amounts that are applicable to you. This would give you the ability to take advantage of all opportunities to reduce your wealth transfer taxation.

If you have any questions about wealth transfer taxation, we encourage you to contact us at the Yee Law Group at 916-927-9001 today.