2009 Estate Planning Figures

The new year brings updated estate planning exemption figures. Occasionally, the IRS adjust these figures in order to keep pace with inflation. 2009 estate planning exemption figures are as follows:

-The estate tax exclusion was increased from $2 million to $3.5 million. This figure represents the amount that an individual can pass to heirs upon death without paying estate taxes. Of course, an unlimited amount may be passed to a spouse without paying taxes. Through proper planning (such as a bypass trust), a couple can now pass up to $7 million to heirs upon death without paying taxes.

-The generation-skipping tax (GST) exemption also increased to $3.5 million. The GST allows individuals to pass assets directly to grandchildren. Increasing this exemption will increase the benefit of stretch IRAs.

-The lifetime gift tax exemption will remain $1 million. Individuals can give up to $1 million dollars collectively throughout their lifetime without paying gift taxes. Only gifts amounts above the annual gift tax exclusion count towards the $1 million exemption.

-The annual gift tax exclusion amount increased from $12,000 to $13,000. This amount can be given to an unlimited amount of individuals annually without counting towards the lifetime gift tax exemption.

Have your estate planning attorney converse with your financial advisor to construct a unified and comprehensive financial plan.