Massachusetts Estate Planning & Asset Protection Blog

Massachusetts Estate Planning Attorney | Year End Gifting Strategies for Your Estate

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Dec 14, 2012

Gifting and other estate tax reduction strategies have been at the forefront of many estate planning discussions as we approach the holidays due to the uncertainty over the estate and gift tax rules for next year. While current Federal estate and gift tax rates have been relatively favorable, much less favorable rules are set to go into effect in January. gifting, estate, planning, holidays

Currently, the federal estate and gift tax exemption is $5.12 million, meaning those with estates worth less than that, or who give away less than that, will not pay Federal estate or gift taxes (the Massachusetts exemption is $1M). The tax rate on estates and gifts above the exemption is a flat 35 percent.

However, unless Congress and the President can agree on a compromise, the Federal estate and gift tax exemption will be reduced to the $1 million credit that was in effect before the Bush tax cuts were enacted. Simultaneously, the maximum estate and gift tax rate will rise to 55 percent.

Gifting Opportunities for Your Estate

Nevertheless, many people are getting ready to make gifts to their loved ones to help reduce their estates. This is because, regardless of what Congress does, you should still be able to rely on the annual gift tax exclusion to shelter lifetime transfers to family members and loved ones. The annual gift tax exclusion hasn’t been affected by other tax law modifications over the last decade and that isn’t expected to change. By systematically giving gifts that qualify for the exclusion, you can gradually reduce the size of your taxable estate over time, thereby reducing your potential estate tax liability.

The current annual gift tax exclusion is $13,000, and it will increase to $14,000 in 2013. You can give gifts of cash or property to an unlimited number of recipients up to this amount each year without any gift tax consequences. The annual exclusion is doubled for joint gifts made by a married couple, although you must file a gift tax return for these joint gifts.

Other gifting opportunities include paying for a loved one’s medical or educational expenses: No gift taxes are imposed on amounts used to pay these costs for another person as long as the bills are paid directly to the provider or institution.

Creating a Planned Gifting Program

In addition to the annual gift exclusions, you can also reduce your taxable estate by bestowing sizeable gifts on as many family members as you desire over a given period of time to reduce your estate tax exposure.

For example, a couple who own $2 million in assets and three adult children could give $28,000 to each child each year for the next five years. By the end of the five-year period, they will have reduced their joint estate by $1.4 million, leaving as estate worth $600,000 (plus earnings in the interim). This would eliminate their exposure to both state and Federal estate taxes. Gifts could be made into an irrevocable trust in order to get assets out of your estate but not subject them to your heirs’ creditors and manage their spending.

However, you must be careful when considering gifting highly appreciated assets such as real estate or stock, as they may expose your beneficiary to capital gains taxes. Gifting through a trust can avoid this outcome as well.

To explore how gifting may benefit your estate, contact The Estate Planning and Asset Protection Law Center of Dennis Sullivan & Associates

Research shows that 86% of trusts don’t work.  That’s why we developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings.  Click Here to Download the Guide.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at


Tags: Attorney, gift tax, taxes, trust, holiday, federal, exclusions, estate, Massachusetts, gifts, gifting, tax

Massachusetts Elder Law Attorney | Does MassHealth’s Penalty Apply Only to Gifts?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Dec 12, 2012

Does MassHealth’s Penalty Apply Only to Gifts?

MassHealth, gifts, elder, law, attorney

When considering the MassHealth penalty elder law clients usually think only in terms of gifts.  However, the penalty is triggered by much more than simply gifts.  The penalty is triggered by a transfer for less than fair value that causes a penalty. Fair value is not measured subjectively, but rather objectively based on fair market value. When there is a transfer of assets out of the applicant’s name, the applicant has the burden of establishing, by documentary evidence that the transfer should not be subject to a penalty.  If it cannot be  prove it – and, again, it is not sufficient to tell MassHealth what the money was spent for – then it is treated as a transfer for less than fair value.  MassHealth requires documentation to prove the fair value.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: MassHealth, Estate Planning, Elder Law, Alzheimer's, gifts, gifting, tax

The Medicaid Time Bomb | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 10, 2012

Today we have some extremely important information for you about what NOT to do when you're trying to get your loved one to qualify for VA benefits.

veterans benefits, VA benefits

There are strict rules that govern whether or not your loved one is eligible, and they're put in place so that someone can't just give away his or her money and automatically qualify. You've got to talk to someone who knows the rules, because they will know what sort of penalties you may incur if you take any such action. Make sure you understand what you're doing before you make any changes to someone's assets. Ordinarily, the VA takes a very dim view of individuals transferring their assets to qualify for this benefit.

Another thing you must know is that giving away cash or other things of value can create terrible problems for senior citizens if or when they later need to apply for Medicaid to assist them with skilled nursing home care. Simply giving away assets can create a long penalty period of ineligibility for Medicaid benefits, which we call the Medicaid Time Bomb.

Don't forget, though - if you decide you need help, nobody can charge you a penny for helping you fill out the VA forms! And as we discussed in an earlier blog, many attorneys (even elder law attorneys!) do not know about the VA's benefits or how to get them. In addition, many attorneys may label themselves as elder law attorneys because they can prepare simple things such as wills - but unless they are working with seniors on both Medicaid and VA benefits every day, they are most likely not versed in the complicated and ever-changing maze of laws that surround the benefits that you or your loved one may need - and often our clients need services much sooner than they think! This is dangerous territory. You need a trustworthy guide who has traveled this path before, and travels it on a regular basis!

Today I will also address a frequently asked question by a veteran's family: "Is there anything we can do to qualify for the VA benefit if the veteran has too many assets?”

This truly is the "million dollar question," and I have to tell you that with one wrong move, danger and disaster lurk close by. A veteran and spouse who might be eligible for $1,949 monthly in aid and attendance benefits or $1,510 in housebound benefits might be considering the idea of gifting excess assets to their children. But there are several questions that you must ask before doing that:

1. What is the tax impact of such gifting?

2. What is the net benefit or loss caused by gifting assets?

3. What is the impact to the one who receives the gift?

4. Does the VA impose a penalty against the veteran if they know that the vet has given away excess assets to qualify?

5. How long does it take to get the VA to approve a claim?

6. How likely is it that the VA will approve the claim?

7. What amount will the VA approve?

8. How soon can the veteran get a check?

A much less obvious but important issue is what I call the "Medicaid Time Bomb." The VA does not have a penalty period of ineligibility for VA benefits, even if the veteran were to give away all of his/her excess assets immediately before filing a claim (not that we would recommend this drastic move).

For more information go to, which contains important information on the “Hidden Benefit” available to veterans and their spouses, and the steps you should be taking right now to find out if your loved one qualifies. For useful information on Alzheimer’s disease including care tips and resources please visit You will be given access to the Complete Alzheimer’s Resource Kit, sold nation wide for $197, absolutely free.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Tags: Medicaid, Elder Law, seniors, taxes, veterans benefits, Massachusetts estate tax, VA benefit, gifts, gifting

Discuss These Estate Plan Topics With Your Children

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Jun 07, 2012


From Your Smart Money Moves (May 31, 2012) “What Four Estate Planning Things Parents Should Tell Their Children”

1. Who is the executor of the estate?  If you have a will set up, it’s important to tell which child or children are the executors of your estate.  Inevitably, they should know where is your will is stored.  It is in a safe deposit box?  It is somewhere at the house?  Or, what’s the name of the attorney that has the will on file?  As the executors of the estate, they’re the ones that are going to be responsible for the orderly administration of all of your assets.  So it’s important to at least let them know that they are the executors. Sometimes, kids don’t want this responsibility. This doesn’t mean you need to talk about how much money you have, but you should be able to let them know that they will be the ones that will be helping to administer the estate down the road.

Estate Planning, Family, Loved One, Asset Protection, Long-Term Care2. What’s the game plan for long term care?  This is one that parents will avoid all day long due to the challenging nature of the question.  Many parents that hit the age of 60, 65, or 70, may or may not have nursing home insurance.  If they don’t have long term care insurance, one of the questions they should be discussing with you is who might be available to help in the future.  Sometimes, the kids want to pay for long term care insurance if in fact the parents cannot afford it themselves.  You may think it’s your middle daughter or you may think it’s going to be your youngest son that will take care of you.  The kids may have thoughts themselves about who’s going to do what or worse yet they may have not talked at all.  So it’s important to have some discussion that if something happens your children have some idea of how the chain of command and responsibilities will roll down at that time.  I had an uncle of mine that unfortunately went into a nursing home and wiped out their entire financial situation.  This is a quality discussion to have as a family.

3. Advanced Medical Directive / Living Will?  You should talk to your kids about whether you have a living will or an advanced medical directive as part of your overall estate planning.  Letting your children know these types of things and if you are an organ donor can at least prepare your children for your wishes somewhere down the road.  You may be uncertain about your wishes if you had some tragic situation that actually put you on some sort of thing that’s keeping your life going.  And if you’ve already pre-made decisions about what’s going to happen, that would be an important thing to share with them.

4. Where Is Everything Located?  I’ve yet to see someone pass away without the family having to deal with some level of mystery on where documents, collectibles, or bank accounts are located.  With today’s technology, getting your finances organized in an electronic account aggregation type software or at least collecting all of your documents in one place with instructions on where everything is located will be important for your children.   Often, families can have a major struggle over personal possessions especially if one member of the family has more knowledge than another including brothers and sisters as well as children.  The goal of doing this isn’t to share your financial picture, but merely give your family a go to person or a location so things can be sorted out easily in the event of a premature death.

As a parent you don’t have to discuss money, your net worth, or what’s happening with your overall budget.  Many parents don’t want to be a burden on their children or they don’t want their children counting on a future inheritance.   Make sure to discuss with your kids these important points so at least they can take the opportunity to discuss and plan their own lives to best support you and your overall estate plan.

For more information on estate planning, asset protection, and elder law we invite you to attend one of our free Trust, Estate, and Asset Protection Workshops.  Register online at or by calling (800) 964-4295 (24/7).  At the Estate Planning & Asset Protection Law Center we help families protect what matters most: their spouse, home, and life savings, from the rising cost of medical and nursing home care.  Did you know that resaerch shows that 86% of estate plans DO NOT WORK.  Research conducted by a colleague with more than 30,000 clients demonstrated the need to review plans.  To help people evaluate the areas in which an existing plan meets a family’s goals and objectives and where significant problems may exist we have developed the 19-Point Trust, Estate & Asset Protection Guide


Tags: asset protection, long term care, Estate Planning, Estate Planning, probate, elder care, gift tax, estate tax, estate tax savings, family, power of attorney, executor, disinherit, Beneficiary, Estate Planning Tip, estate, gifts

7 Major Errors In Estate Planning

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, May 16, 2012

As estate planning and asset protection professional we often times help people and their family by reviewing existing planning.   As discussed in a recent Forbes article, the following is a list of major estate omissions and poor choices we see on a consistent basis.  Estate Planning, Asset Protection, Tax Changes, Estate Tax, Gift TaxIt is crucial to have your planning reviewed and updated consistently.  As a result of changes in the law, in health and in personal circumstance an old estate plan may not be working to accomplish your goals.  To learn more about how the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates can help you and your family visit or call (800) 964-4295 (24/7). 

1. Not having a plan

In a sense, everyone does have an estate plan; state law makes this point a certainty.  It simply may not be the plan that you had in mind, or that your family would have preferred.  Not having a will means that at your death the distribution of your assets will be dictated by the inheritance laws of the state where you were domiciled when you died.  These “intestacy laws” vary from state to state but, typically, leave percentages of your assets to various family members.  There is always a remote chance that these laws will accomplish what you would have intended – but not likely. It is highly improbable that, by chance, your dispositive intentions as to who gets what, when and in what form will be fulfilled.  This is true even if your estate is below the tax threshold.  Your will applies to the disposition of your “probate assets” – those assets NOT otherwise following a beneficiary designation or the titling of the asset. Non-probate assets will pass by operation of law or contract. For example, whoever the beneficiary designation may have been when you originally began your 401(k) or IRA at the start of your work life will override either your will or the laws of intestacy.  Even a simple plan that is well thought out and results from the identification of your personal objectives will be much more successful than nothing at all.

2. Online or DIY rather than professionals

There has been a noticeable uptick in the number of people who will look to the Internet to prepare their own wills and trusts. There are dozens upon dozens of websites that will profess to offer you just the right discounted estate planning documents.  Even wealthy clients who stand to benefit the most from expert planning advice have been impacted. Unfortunately, relying on web-based, do it yourself solutions is a recipe for disaster.  Estate planning documents should represent the culmination of a well thought out financial and estate plan. An amalgam of stand-alone documents does not a plan make.  Furthermore, those pesky nuanced requirements (i.e. the “formalities”) for a validly written and executed document will vary from state to state.  Internet sites can provide you with documents but no actual advice that fits you in the context of your specific financial and personal life.  What happens when the laws change? Does the document create an unnecessary tax if the state and federal tax laws diverge substantially?  Also, use an experienced estate attorney.  All wills are perfect documents while they are in your desk drawer.  Only when examined post-mortem are the inadequacies revealed.

3. Failure to Review Beneficiary Designations and Titling of Assets

One of the most basic and most overlooked items on every estate-planning checklist is the review of beneficiary designations and the proper titling of accounts. Unwittingly, many people will often let beneficiary designations and asset titling determine their estate plans for them, contrary to their intentions. Why? Regardless of what your well developed wills and trusts say, your beneficiary designations and the title of your assets will control the ultimate distribution of those assets. Most investment accounts allow for the designation of a beneficiary (IRAs, 401(k)s, company plans, etc.).  More recently, many states have enacted legislation to convert even otherwise ordinary brokerage accounts into accounts with beneficiary designations via Payable/Transfer Upon Death Registrations. All of these beneficiary designations absolutely control who gets the asset at your death.  The titling of assets is a property law concept with estate implications. An account that is held jointly with right of survivorship will pass automatically to the survivor of the joint owners.  Why does this matter?  Assets can flow to the wrong people due to old, wrong and/or out-of-date designations, often with unintended estate and income tax implications.

4. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance

Life insurance proceeds are included in the estate when owned by the insured at death. However, the insured may choose to transfer all incidence of ownership during his/her lifetime thereby avoiding any potential estate tax inclusion. Notwithstanding this accessible planning fix (usually via trust), relinquishing ownership and control is not necessarily an automatic decision. In some instances, large sums of available, tax-advantaged and asset-protected cash has accumulated in permanent life insurance policies (i.e. whole life).  Accordingly, the decision as to how an insurance policy should be owned and, as importantly, controlled, can be complex and is highly individualized. In the right fact patterns, especially when tax is not the only important consideration, credible arguments can be made for both trust ownership and direct ownership. As in most estate planning, it is very much dependent on individual circumstances: family dynamics, net worth, financial / liquidity position, personal preferences and, even, your philosophy on the transfer of assets to future generations.

5. Maximizing annual gifts

Gifting is, probably, the oldest and best way to minimize future estate taxes. The entire universe of exemptions and deductions available for the reduction of estate taxes consist of:  the lifetime exemption ($5.12 million in 2012), the marital deduction (for gifts to citizen spouses during life or at death), the gift and estate tax charitable deduction, annual exclusion gifts ($13,000 in 2012) and direct transfers (not to be treated as gifts) for education (tuition) and medical care (both theoretically unlimited). For the wealthy, maximizing all of these is smart planning. Making annual exclusion gifts every year to as many family members (this includes anyone close to you) as is financially prudent (given your financial situation) is good planning. Over the long run, you can transfer significant sums of money out of your estate along with any appreciation, thereby reducing the tax. Even better planning would be to use your annual exclusion gifts, strategically,  so that each annual gift can be leveraged into larger sums being transferred out of your estate. Strategies such as sales/gifts to defective grantor trusts, the use of LLCs/FLPs in the case of hard to value assets and life insurance are just a few ways to leverage the annual exclusion gifts. In the case of gifting, leverage is a very good thing and strategies that allow you to leverage this scarce resource – tax-free gifts – are crucial to successful estate planning.

6. Failure to Take Advantage of the Estate Tax Exemption in 2012

As every estate and financial planning practitioner will tell you (and probably already has told you), making lifetime gifts is a simple and effective estate tax minimization strategy.  Simply giving away assets at no gift tax cost will allow both the corpus and its appreciation to escape the Federal estate tax on the passing of the donor.  Using the exemption equivalent amount during your life is better than leaving it for use at death.  The urgency is to act now to take advantage of the current estate tax regime that it is set to expire at the end of 2012.  Above and beyond the annual exclusion gift limit of $13,000, the federal applicable exemption amount for transfers during life (gifts) and death (estates) has increased (by indexing) to $5,120,000 per person for 2012 — by far the highest it has ever been since the establishment of the estate tax. Wealthy individuals who have both the means and desire to do so, should plan on making these gifts during 2012.

7. Leaving assets outright to Adult Children

In recent years, there has been a growing opinion among advisors for wealthy families that assets should remain in trust, even for adult children, for as long as possible for the asset protection and other benefits that a trust can offer. For a wealthy couple with adult children, the question may no longer be a one of legal capacity or maturity (although those issues may still remain). The bigger questions may, more accurately, become: who should really benefit from the fruits of my labor and how do I protect those assets from creditors, potential creditors and ex-spouses.  Depending on your perspective, dictating from the grave may or may not be a pejorative expression. For as long as trusts have been in existence (800+ years), the idea of controlling assets for as long as allowed with a set of instructions has been considered acceptable and often sought after planning.  In fact, centuries ago, keeping assets in trust forever was, more likely than not, the goal; hence the genesis of the “rule against perpetuities.” This rule was law in all 50 states to prevent perpetual or “dynasty” trusts. Over the last several years, many states have been modifying this rule to allow for longer trusts or have outright abolished the rule. Whether or not to leave assets in trust for adult children depends on many factors; not the least of which is personal preference. However, in our litigious society of high divorce rates, leaving some assets in trust with fairly liberal access is certainly worth consideration.

For more information on how you can avoid major errors in your estate planning register to attend an educational workshop hosted by our team of estate planning professionals by going to or by calling (800) 964-4295 (24/7).  You can also access several free guides and reports on our website by clicking HERE

We look forward to helping you and your family.


Tags: asset protection, Estate Planning, Estate Planning, GST tax, gift tax, estate tax, estate tax savings, Massacusetts Estate Tax, 401(k), Massachusetts estate tax, Estate Planning Tip, estate, gifts

Tax Changes: A Boon for Gift Fund Donations

Posted by Dennis Sullivan & Associates on Tue, Apr 26, 2011

According to some barometers, there has been a recent surge in charitable giving over these, the first few months of 2011. Apparently, a good number of people have figured out that now is a good time to give.

As a recent article on reports, “The Vanguard Charitable Endowment Program, the nation's second-largest, collected about $129 million during the first quarter, a 60% in- crease over the same period a year earlier. Donations out of the $4.8 billion fund totaled $87 million, a 31.2% increase from $66 million.”

Why the sudden increase? The new tax deal reached in December makes 2011 and 2012 particularly attractive years for charitable giving. Conditions are ripe for estate reduction, and charitable giving is one of the best forms of estate reduction.

There is something counter-intuitive to this giving season, though. If estate reduction is the motivation for charitable giving, and if you should be swayed into practicing it yourself, why is it important to do so now, with the estate tax exemption at an historic high ($5 million) and the rates at generous lows?

You just cannot forget the fact that these conditions are temporary, and set to expire at the end of 2012. President Obama, speaking for most liberals, has already voiced his plans on lowering the Gift and Estate tax exemptions far below their current generous rates as well as increasing taxes on the wealthiest Americans. And with the recent (and long-overdue) focus on debt-reduction, wealth transfer taxes are quite likely to experience a resurgence of popularity in Congress.

Experts are recommending that wealthy individuals and families make the most of the existing philanthropy-friendly tax provisions before they disappear. You can learn more about gifting strategies in the Estate Planning Strategies section of our website. To learn more about gifting, and other estate planning options, attend a free Trust, Estate and Asset Preservation workshop. 

Tags: 2011, gift tax, New estate tax law, gifts

Obama's Estate Tax Budget Proposals

Posted by Dennis Sullivan & Associates on Tue, Mar 22, 2011


We all should realize that the federal estate tax is in a state of flux. The current rules, with the generous $5 million individual exemption ($10 million for a couple), expire at the end of 2012. Last month, the Treasury Department released the “General Explanations of the Administration's Fiscal Year 2012 Revenue Proposals,” also known as the “Greenbook.” The Greenbook reveals that the Obama Administration intends to make some big estate tax changes.

  • Return the Gift, Estate, and Generation-Skipping Transfer (GST) taxes to 2009 levels. The Greenbook proposes that in 2013 the exemptions return to $3.5 million for the estate tax, $1 million for the gift tax, and slightly over $1 million (reflecting inflation adjustments since 1999) for the generation skipping transfer (“GST”) tax.
  • Make portability permanent. Portability is the ability of the first spouse’s estate exemptions to be passed on to the surviving spouse, essentially doubling the estate exemptions for couples while cutting down on the stress of so many trusts.
  • Limitations on the use of valuation discounts. Although the IRS has long had defenses in place against attempts to reduce the value of the taxable portion of an estate, Chapter 14 of the tax code, the effectiveness of these defenses have been challenged in a number of ways and part of the proposal is to strengthen Chapter 14 by significantly hampering any effort to receive a valuation discount.
  • Impose a ten-year minimum term on GRATs. Grantor retained annuity trusts (“GRATs”) have become extremely popular estate planning vehicles over the past several years.  Among other reasons, they are relatively low cost to implement, are fairly low risk, and can transfer significant amounts of wealth to lower generations with virtually no estate or gift tax, often without using any of the transferor’s exemption. One requirement for a successful GRAT, however, is that the grantor must survive the term, otherwise the trust “fails.” To minimize risk, estate lawyers usually use a series of short-term (e.g., three-year) GRATs in their planning. The proposal is to require a term of no less than 10 years. This proposal would apply to GRATs created after the date of enactment, and has been made several times in the past.
  • Limiting the capacity of Dynasty Trusts. Under current law in many states, a Dynasty Trust can be established to transfer wealth across generations and exist for that purpose “in perpetuity.” The Obama proposal would provide that, on the 90th anniversary of the creation of a trust, the Generation-Skipping Tax (GST) exclusion allotted to the trust would terminate. This proposal would apply to trusts created after enactment, and to the portion of a pre-existing trust attributable to additions made after the date.


Many of these proposals have been made before, and most arelikely to face stiff opposition.

In addition, Massachusetts will assess a state tax on estates over $1 million. Without proper planning a married couple will have only $1 million between them.  See a lawer to be sure that you and your spouse get the $2 million exemption available to you.

Also, Massachusetts clients and taxpayers need to watch out for estate plans created based on maximum federal applicable exclusion planning, common for many estate plans prior to 2003. Now with the $5 million federal exempt amount, there could be a COMPLETELY AVOIDABLE Massachusetts estate tax triggered at the first death. The cost to your spouse and family could be as much as $400,000 in unnecessary estate taxes.

The point of all of this is that the “death tax” is not dead. The current law, with its generous exemptions, could be the calm before the storm. A wise planner would move sooner rather than later to preserve estate assets for future generations.

You can learn more about comprehensive estate planning by attending one of our Trust, Estate & Asset Protection Workshops and also by downloading our Unique Self-Guided 19-Point Trust, Estate & Asset Protection Legal Guide on our website.  Once you become a client, we have a Lifetime Protection Program to ensure that your planning stays up to date with the changes in law, fincial, health and family situations.


Tags: Estate Planning, Estate Planning, GST tax, gift tax, estate tax, Massacusetts Estate Tax, massachusetts estate planning strategies, Massachusetts estate tax, tax exemption, New estate tax law, GRATs, IRS, gifts

2011 Tax Law Offers Unique Gifting Opportunity

Posted by Dennis Sullivan & Associates on Thu, Feb 10, 2011

Lifetime gifting has always been an important aspect of comprehensive estate planning. As the old saying goes, “If you’re giving while you’re living, then you’re knowing where it’s going.” But the new tax legislation passed in December makes gifting even more attractive for wealthy families.

A recent article in the Wall Street Journal, “The $5 Million Tax Break,” points out why lifetime gifting is suddenly so attractive under the new laws. It’s a good article, worth reading, but here are the high points, in a nut-shell:

For the next two years, the gift-tax exemption jumps to $5 million from $1 million for individuals, and to $10 million (up from $2 million) for couples. What’s more, the tax rate on gifts above those amounts fell to 35 percent, from a scheduled 55 percent.

The gift tax has long been a feature of the tax law, and the gift tax exemption in recent years has remained lower than the estate tax exemption to discourage the wealthy from draining their estates through gifts in order to avoid estate taxes. This new gift tax break, however, may be an important tax planning strategy to consider now, especially for family business owners who want to transfer business interests to the next generation.

Why? If you make your gifts now – or within the next two years – you can take advantage of what could be a short-lived tax break, locking in potentially significant tax savings for your heirs. Savings large enough that they could mean the difference between a business continuation or a business failure. Who knows what Congress will do after 2012? While many hope lawmakers will extend the current regime beyond 2012, other events – such as a debt crisis – could render these breaks temporary. For more information on Gifts and the Massachusetts estate tax,check out the Gifting Strategies in Estate Planning on our website.

You can learn more about transfer taxes, including estate taxes, gift taxes and the generation-skipping transfer tax at the Tax Planning Strategies section on our website. 

Tags: 2011, GST tax, gift tax, estate tax savings, massachusetts estate planning strategies, GRATs, gifts

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