You pay taxes that come from every direction throughout your life, so you may naturally assume that you can transfer assets to other people free of further taxation. This make sense to a lot of people, but whether we like it or not, there are asset transfer taxes in the United States. One of them is the generation-skipping transfer tax.
The generation-skipping transfer tax is potentially applicable on large asset transfers to people who are not relatives who are at least 37.5 years younger than you are. This tax can also be levied on transfers to family members who are more than one generation younger than you.
Other Transfer Taxes
We used the term “large asset transfers” in the previous section because the generation-skipping transfer tax is one of three taxes that can come into play when you are transferring assets. There is a unified exclusion that you can use to transfer assets to others tax-free before any of these taxes would kick in.
The other two taxes are the federal estate tax and the federal gift tax. The amount of the unified exclusion that applies to all three taxes is $5.43 million in 2015.
Free Transfer Tax Report
We have prepared a special report that takes an in-depth look at the federal estate tax and the other transfer taxes that can come into play when you are a high net worth individual. This report will provide you with a great deal of very useful information, and it is being offered to our readers on a complimentary basis at the present time.
To access your copy of the report, click this link and follow the simple instructions: Report On Federal Transfer Taxes.
Transfer Tax Efficiency Strategies
People who are exposed to federal transfer taxes are faced with a significant degree of asset erosion. At the present time, the maximum rate of the tax is is 40 percent, and this is quite an attention-getting figure.
The good news is that there are things that you can do to position your assets in a tax efficient manner. There are various different trusts that are used for tax efficiency purposes, and there are other legal structures that can provide tax benefits.
If you take the right steps, you can preserve your hard-earned wealth and make things easier for your loved ones.
The most effective strategy will vary depending on the case in question. Personalized attention is the key to an optimally constructed wealth preservation plan.
We can help if you would like to discuss your unique personal situation with an experienced and qualified professional. We would be glad to help you gain an understanding of your situation, become apprised of your objectives, and make the appropriate recommendations.
To set up an appointment, send us a message through our contact page: Sacramento CA Estate Planning Attorneys.
- Living Trusts and Incapacity Planning - March 31, 2020
- Estate Planning and Charitable Giving — Key Points - March 29, 2020
- Over-Funding Your Retirement Plan: A Potential Estate Planning Problem - March 27, 2020