Wealth Transfer

Taxation almost always accompanies the transfer of wealth. However, which of your assets are taxed, when they are taxed, and the rate at which they are taxed are to some degree within your control.

Take, for example, planned giving. During your lifetime, you, in your capacity as “donor,” are entitled to give away cash, stocks, bonds, real estate, and business interest without incurring a “gift tax,” so long as the cumulative value of the gifts to any one person (US citizen spouses and charities excluded) do not exceed the per-recipient annual exclusion amount of $15,000 (in 2018).

Moreover, while gifts by US citizens or resident aliens in amounts over $15,000 to persons other than US citizen spouses or charities require the filing of a gift tax return, gifts up to gift/estate tax exemption amount of $11,180,000.00 (for 2018) can be made without incurring a gift tax.

The per-donor lifetime gift/inheritance tax exemption however, is considered part of your estate, and will therefore eventually influence your estate tax in the following way: Each decedent has a unified credit exemption from the estate tax, unless that exemption is used to exempt gifts made during your lifetime. All assets whose value exceeds that federal unified credit exemption are taxed at fairly high rates upon your death.

These exemptions apply to US citizens and resident aliens in San Mateo County. So, if your thoughts about estate planning include gifts to others this year, feel free to contact the lawyers at McDowall Cotter for further information about lifetime gifting strategies through revocable living trusts, wills, charitable remainder trusts, and other estate planning techniques. We can also assist with lifetime estate planning through the use of Advance Healthcare Directives and Powers of Attorney for Finances.

There are numerous ways to discount the annual and lifetime gift tax exclusion so that your loved ones receive an amount greater than the market value of the gifts. These include the formation of irrevocable life insurance trusts (ILITs), limited liability companies (LLCs), and family limited partnerships (FLPs). There are also many ways to influence the estate tax.

if you are based in the San Francisco Peninsula, (San Mateo, Palo Alto, Redwood City, Foster City, Burlingame, Mountain View…), South Bay (San Jose, Sunnyvale, Santa Clara…), Alameda County (Oakland, Alameda, Berkeley, Pleasanton…) and would require more information on taxation and wealth transfer, our team of dedicated lawyers are available to provide you with guidance. At McDowall Cotter, we create comprehensive wealth preservation and transfer plans that help you mitigate taxation and maximize family wealth.

McDowall Cotter is a San Mateo based law firm and has served clients in the greater San Francisco Bay Area for more than half a century. In that time, we have established a reputation, in the courts and in the community, for ingenuity, integrity and a common-sense approach to the practice of law. Our knowledge of law ranges widely from business counsel to wealth preservation to dispute resolution and litigation. All of our services are rooted in a thorough understanding of the law, extensive experience with trials and appeals, and a longstanding commitment to protecting not only our clients’ interests but also their peace of mind.

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