There are many different things to remember if you’re just getting started with the estate planning process but there are three primary ones to keep in mind. In 2016 you can leave gifts for other individuals worth up to $5.45 million free of federal estate taxes. This is known as your estate tax exemption.
If you are married, you and your spouse are each entitled to separate $5.45 million exemptions, and if one spouse passes away the left over amount can be transferred to the other spouse. You may also be eligible to take advantage of the gift tax exemption. Each year you are eligible to give away $14,000 to another individual before triggering taxes. Married couples can give away twice this amount.
The bottom line is that very few people will ever reach the point of actually owing any federal gift tax. Giving your money away on a regular and scheduled basis can be extremely important for helping you avoid taxes and to put together a comprehensive plan for asset distribution. This can be an important component of your overall estate planning. To learn more about the process of estate planning, contact an experienced New Jersey estate planning attorney.