Plan How to Lower Estate Taxes
By Saghir Aslam
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
One parents maxed out their lifetime gift exemption that means they contributed more than $10 million to the trust. It also probably means they employed an estate-planning attorney, since such trusts aren`t typically do-it-yourself projects. If that`s the case, the attorney probably has reviewed with them their other options for minimizing taxes.
They could, for example, give each sibling $28,000 ($14,000 from each parent) each year-
And make similar gifts to each sibling`s spouse and children. If they were so inclined. This rule apply to any one parents can donate $14000- each to children, grandchildren great children and other if try so desire. This all will help reduce estate taxes .
Now it depends on you how much money you want to donate. You do have variety of
Choices to donate any one you want up to $14000- each. Which means you can donate any amount $1000-,$5000- any and as long as it doesn’t increase $14000-, as always ;once again I request you to please check with your financial advisor as the rules change and they also vary from state to state so you must discuss with your Accountant and with your financial advisor along with your attorney.
This annual exemption limit is separate from the lifetime gifting exemption they`ve already used. If each of you is married with two kids, that would move $672,000- out of their combined estates each year.
Another way to move money out of their taxable estate, either now or at their deaths, is to donate to charities.
If they opt not to take further steps, you can take comfort in the fact that the top estate tax rate is 40% which means that the bulk of their estate will still reach their heirs.
Also keep in mind that you`re in rare company-only about two estates out 1,000 are large enough to trigger an estate tax return, now that exemption limits have been raised to $5.49 million a person.
Family members want if to receive spousal or child benefits based on the primary earner`s work record, that primary earner has to be receiving his or her own benefit.
In the past, people who had reached full retirement age-which used to be 65, is now s66 and is rising to 67 – had the option of immediately suspending their applications so their family could receive benefits while their own continued to grow. The “file and suspend” option was not available to people who applied for benefits before their full retirement age. And now it`s No longer available period.
If you do apply for your benefit early, keep in mind that your checks- and your children`s checks – will be subject to the earning test, That reduces Social Security benefits by $1 for every $2 you earn over $16,920 in 2017 (The earnings test goes away at full retirement age.)
Your benefit also will be reduced to reflect the early start.
Also, there`s a limit to how much a family can receive based on the workers record. The family maximum can be from 150% to 180% of the parent`s full benefit amount.
If you`re still working and your children will be younger than 18 by the time you reach full retirement age, it may make sense to wait until then to apply.
To know for sure, though, you calculators that takes child benefits into account, such as Maximize My Social Security.com.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)