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Don’t Miss This Once In a Lifetime Tax Savings Opportunity


We have a very small amount of time to take advantage for what many of us is a once in a lifetime opportunity. At the end of 2012, many of the existing laws for estate taxes expire and revert back to what existed before the changes enacted by President Bush. This means that many people will be subject to estate taxes at much higher rates than currently exist.

Before you stop reading this article because you do not believe this applies to you, consider the following:

The value of what is included in your estate includes everything you own including:

  1. The value of any business you own
  2. The amount of any life insurance proceeds that go to your surviving spouse or family
  3. The current value of all of your retirement plans
  4. Your share of jointly held property such as your home

Here is the catch. Most people only consider such things as cash, investments, real estate, autos, collectibles, clothing, and furniture, and assume that they do not have enough assets to be taxed. However, even adding just the average amount of life insurance proceeds from the list above will push you over the limit and you can wind up paying taxes as high as 55%!

We do not know what the next President and Congress will do, but the best guess at this point is that no matter who is in office, benefits will be eliminated – This creates a once in a lifetime planning opportunity.
The current estate and gift tax laws are due to sunset (expire) on December 31. 2012 creating opportunities for those who are willing to take advantage of strategies immediately.

Here is a summary of the changes that are going to be effective January 1, 2013:

  • The exemption from estate taxes decreases from $5,120,000 to $1,000,000
  • The maximum amount of tax on the amount in excess of the exemption increases from 35% to 55%
  • These rules also apply to gift taxes

There are a quite a few ways to avoid the estate tax. Here are some of the major strategies:

  • Shift assets out of your estate by creating gifts
  • Shift assets out of your estate by creating trusts
  • Create a trust to pay life insurance to pay estate      taxes at substantially reduced costs

The rules are quite complex and you will need a good team to help you – a CPA, an estate tax planning attorney, and an insurance professional.

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