When Bob dies, his trust uses his million exemption.When Sue dies, her trust uses her million exemption.
It can be very satisfying to see the results of your gifts, something you can't do if you wait until you die.
Appreciating assets are best to give because any future appreciation will also be out of your estate.
Federal estate taxes are expensive (historically, 45%-55%) and they must be paid in cash, usually within nine months after you die.
Estate taxes are different from and in addition to probate expenses, which can be avoided with a revocable living trust, and final income taxes, which must be paid on income you receive in the year you die.
But when Sue dies, her estate of $10 million uses her $5 million exemption. Also, by leaving everything to Sue, Bob has no control over how his share of the assets are managed or distributed.
Plus, any growth on the assets will be included in Sue's estate and taxed when she dies.(If you use it while you are living, it's considered a gift tax exemption; if you use it after you die, it's an estate tax exemption.) Charitable gifts are still unlimited.So are gifts for tuition and medical expenses if you give directly to the institution.8.Because few estates have the cash, it has often been necessary to liquidate assets to pay these taxes.But, if you plan ahead, you can reduce and even eliminate estate taxes.2. Your estate will have to pay federal estate taxes if its net value when you die is more than the exempt amount set by Congress at that time.Although we remain grounded in our core values established by our founder Marvin Holland, it is our desire to continually develop the best solutions for our customers that drive us forward.