Estate Planning is all about peace of mind. What estate planning is all about is discovering the rig...

1. New estate tax rules call for new planning tactics | Reuters
Estate Planning is all about peace of mind. What estate planning is all about is discovering the right
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NEW YORK After years of changes and political arm-twisting, the federal estate tax rules became
clear and stable with the year-end fiscal cliff deal. They are now set permanently into the tax code -
at least until the tax code changes again.
The amount an individual can exclude from estate taxes (including gifts given during his or her
lifetime) is an extremely generous $5.25 million per person for 2013.
That leaves very few people who will be subject to the tax. After all, a couple could exclude $10.5
million from estate or gift taxes, and with smart estate-planning - putting assets into an irrevocable
trust, for example - pass on many times that amount tax-free to the next generation. The result: Just
3,800 estates are expected to be big enough to owe any federal estate tax in 2013, according to
estimates from the Tax Policy Center.
That is a relief to many would-be estate tax
payers. Without the year-end tax agreement, the
exclusion was slated to revert to $1 million per
person -- an amount that worried homeowners in
high-priced real estate markets like New York
and Los Angeles -- with a 55 percent tax rate on
most estates.
The new top tax rate for estates is 40 percent.
"Everyone is taking a big, deep breath," says Dan Schrauth, a wealth adviser in J.P. Morgan's San
Francisco private banking office.
Last year's uncertainty led wealthy clients to race though plans and gifts that ordinarily might have
been been handled slowly and thoughtfully. Some, in their mad dash to act before the end of the
year, gave away money and seeded trusts with quick cash. But there's scant evidence they gave
away more than they really wanted to.
"I'm not seeing any clients who have remorse about doing gifting," Schrauth says.
Those who put cash into a trust may now choose to invest it in growth stocks or other assets
expected to appreciate over time. Depending on the type of trust, they may also be able to swap the
cash out for existing assets currently held outside the trust.

2. Those who ran out of time before making
gifts last year won a reprieve, and anyone
still thinking about getting money out of their
estates can make gifts and feed trusts this
year.
The annual gifting rules allow you to give up
to $14,000 per person in 2014(up from $13,000 in 2012) tax-free. These gifts don't count toward the
lifetime $5.25 million exclusion, and can add up quickly: A couple with two adult married children,
for example, could give $28,000 to each this year, plus $28,000 to each spouse, for a total of
$56,000. With education costs high and rising, these funds could seed a 529 college-savings plan for
your children or grandchildren.
Ironically, a poor economy can help, because it may depress the value of securities, real estate and
businesses, allowing people to get more out of their estates. Wealthy families generally seed trusts
with growth stocks or businesses likely to expand; that's because once the asset is transferred, it is
out of the estate and its appreciation won't be subject to any future estate tax.
While heirs could eventually owe capital gains taxes when they sell those assets, the long-term
capital gains rate, at 20 percent, is half the estate tax rate.
Those who used up their lifetime $5-plus million exclusion before year-end can still give more this
year. That's because the exclusion is inflation-adjusted, and it rose by $130,000 for 2013.
Even if you doubt you'll ever have such a high level of assets, it still pays to plan ahead. Pay
attention to the rules in your state: Some states have estate and inheritance taxes that kick in at
https://www.youtube.com/watch?v=7cRUZj-ddJU lower levels than do the federal ones and could
take a bite out of funds you'd hoped to pass on.
The more important reason to plan is to make sure that what you want to happen after you're gone
does. Who gets control of the business? Who gets the family home? Will a special-needs grandchild
have the necessary funds available? Even if you don't need to do tax-motivated estate planning,
you'll want to get your will in order, and make sure it still represents your wishes.
"Everybody should think about their estate regardless of the level of assets," says Barry Fischman, a
partner at accounting firm Marcum. "The biggest hurdle is psychological. People say, 'I'm not ready
to do anything. I want to maintain control until the day I pass.' You have to have these conversations
that really have nothing to do with the law, but have to do with the emotional attachment and
control."
How much you'll want to give now depends not just on your financial situation, but
https://www.wellsfargoadvisors.com/financial-services/estate-planning.htm on your ability to tolerate
risk and uncertainty. As Schrauth says: "Clients should never make gifts that won't let them sleep at
night. The over-arching theme is, what do you feel you can afford to irrevocably give away?"
(Follow us @ReutersMoney or here Editing by Linda Stern and Andrew Hay)
http://www.reuters.com/article/2013/02/26/us-column-feldman-idUSBRE91P0NY20130226

3. Ultimately, estate planning is concerning peace of mind. The procedure itself is extremely important
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