A little planning can save thousands of dollars!

The principal of the firm, Craig S. Peligri, in addition to being a Certified Public Accountant, is also an Attorney at Law licensed in the states of New York and New Jersey. One of the primary areas of practice Mr. Peligri specializes in is estate planning and the preparation of all estate plan documents including that of wills, trusts, Powers of Attorneys, and health care proxies. Mr. Peligri’s knowledge of the estate tax laws combined with his experience in proper estate succession enables him to properly plan on the best method possible to transfer your assets to your heirs, while at the same time concentrating on the minimization of estate tax at both the federal and state levels.

Officially, the estate tax has been repealed, but only for 2010. That's due to a provision in a 2001 law that gradually reduced the estate tax rates and increased the exemption amount, setting the tax to expire completely in 2010. According to that law, the estate tax is scheduled to be reinstated in 2011 at its pre-2001 levels.

Congress expected to deal with the estate tax by the end of 2009, and the House did in fact pass a permanent extension of the tax at 2009 levels (with a 45% top rate and a $3.5 million exemption). The Senate, however, was focused on health care reform and ran out of time, leaving the estate tax issue for 2010.

Now, the expectation is that the Senate will deal with the estate tax in 2010, reinstating it retroactive to the first of the year. However, there is still no consensus on what the law should be and no certainty that a bill will pass quickly.

Though Congress may not find it easy to reach an agreement on the estate tax, you can be sure they are not likely to have it disappear even for one year. That means planning is still advisable.

You may be surprised what your estate is worth. Add up the value of all your assets. Don't forget life insurance which may fall into your estate. You should look into what a few simple planning techniques can save your family at estate time. In addition, there are some very effective estate planning ideas that can also cut your current income tax bill.

Use our estate planning calculator to help you determine what your estate is worth.

Some planning possibilities:

• Gifting
  Current tax law allows you to give away a certain amount each year to as many recipients as you choose. Your spouse may join in the gift even if he or she is not an owner in the transferred asset. This means that you could transfer double the exempt amount each year to each of your heirs. To double the annual exclusion yet again, you may want to include spouses of your children. The person receiving the gift does not need to be related to you. These annual gifts do not reduce your estate tax exclusion.
• Unlimited gifts
  You can make unlimited gifts to pay for another individual's medical expenses or school tuition as long as your payments are made directly to the institution.
• Property transfer
  If you have property which is not needed for your retirement, maybe it is a candidate for transferring during your lifetime. If it is a large income-producer, the future income will be taxed to the new owner and not to you, plus the property will be out of your estate.
• Spousal transfer
  You can make unlimited transfers to your spouse either during your lifetime or through your estate. There are no taxes on spousal transfers, regardless of size. But leaving everything to your spouse may not be a good idea, since doing so fails to utilize the lifetime exclusion amount in the estate of the first spouse to die. Planning will allow you to use the exclusion in both estates, and you'll be able to transfer twice as much to your heirs free of estate tax.
• Life insurance proceeds
  With proper planning, certain life insurance proceeds can be kept out of your estate.

For assistance with your estate planning, contact us.