Posts tagged with "2014"

Keep Your Estate Planning Documents Current

Too often we will responsibly execute legal documents, put them in a safe place and then promptly forget about them. An experienced estate planning attorney can assist with keeping your important legal documents current by making appropriate changes to these documents based upon your life or lifestyle.

There is no set schedule for updating your will, living will, durable power of attorney or living trust, etc. but there are some life events that may serve as a guideline. Some of those events could be getting married or a change in your marital status whether that is a divorce, the death of a spouse or a remarriage. Another may be becoming a parent.

Other life changing events impact our assets, perhaps making a major purchase like becoming a homeowner or selling a property, receipt of a substantial inheritance, moving to another state or even a change in the tax code would merit a review of our important documents. Changes in financial status, whether positive or negative, may warrant an update to your existing estate planning documents or in some instances, be better served by more complex legal documents.

Retirement is another milestone that can impact estate planning with regard to changes in financial needs and status. Sometimes life challenges like becoming disabled or other serious physical ailments may force us to re-evaluate our needs. Also, as we advance in years or experience negative changes to our health, we may wish to modify our estate planning documents.

It is important to periodically contact your attorney so that you can discuss life changes, review your important legal documents and effectively plan for the future. Like any successful partnership, you will want to trust and be comfortable with the lawyer with whom you choose to do business. Evaluate your research, use common sense and hire the attorney you feel will best represent and champion your needs.

It is important to update your documents frequently, and it is even more important to do that with experienced estate planning attorneys like those at Maya Murphy, P.C. If you would like to speak to one of our estate planning attorneys feel free to call 203-221-3100 or email at today!

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2014 Estate & Gift Tax Limits Adjusted For Inflation

Starting next year, people who have done some estate planning and made the maximum tax-free transfers to their families (and those thinking about doing it) can take another crack at it. Beginning January 1st 2014, the amount folks can pass on during life (and at their death) completely free from federal estate tax will increase by an additional $90,000.

Using the Consumer Price Index data for the most recent month and the preceding 11 months, the tax experts at Research Institute of America calculated and reported increases for 2014 to a number of tax limits including the income where the various marginal tax brackets apply, the standard deduction amounts, the personal exemption amount, and a number of other items. They also calculated adjusted amounts for the various estate tax and gift tax limits that will apply in 2014.

Gift tax limits rise in 2013
2013 tax rules than can save you money
Reducing taxes on IRA payouts

Here are a few of the new limits that affect tax free gifts made in 2014:

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2014, the exclusion amount will be $5,340,000 (up from $5,250,000 for gifts made and estates of decedents dying in 2013).

This means that in 2014, each person has a credit that can be used to offset the estate tax on a taxable estate of up to $5.34 million of assets. The practical application of this is that individuals can make gifts during life or transfers at death of up to this new higher limit and pay no federal estate tax. Also, new last year is that spouses may combine their unused individual credit amounts and pass on assets free of estate tax on a taxable estate of up to $10.68 million at the death of the second spouse, assuming none of these credits were used during their lifetimes.

Other estate limits that change in 2014 include:

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $5,340,000 for transfers in 2014 (up from $5,250,000 for transfers in 2013).

Increased annual exclusion for gifts to non-citizen spouses. For gifts made in 2014, the annual exclusion for gifts to non-citizen spouses will be $145,000 (up from $143,000 for 2013).

Foreign earned income exclusion. The foreign earned income exclusion amount increases to $99,200 in 2014 (up from $97,600 in 2013).

Gift tax annual exclusion. For gifts made in 2014, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2013). Generally the amount that can be given to any individual each year that is excluded from the gift tax is $14,000 per person per year. In 2014, this amount is projected to remain at $14,000 per person as the amount that may be gifted annually free from the gift tax. Parents may also use the technique of “gift splitting” or combining gifts to a child, whereby they can each make a gift of $14,000, for a total amount of tax free gifts made of $28,000 to a single person or child each year.

credit-Ray Martin

If you have any questions about this information, or if you would like to speak with one of Maya Murphy’s experienced estate planning attorneys, call 203-221-3100 or email today!

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