Understanding the Annual Gift Tax Exclusion and Lifetime Exemptions
High-net-worth families often hear about the “gift tax,” but the rules governing wealth transfers are more nuanced than many people realize. Two key components of the federal transfer tax system are the annual gift tax exclusion and the lifetime estate and gift tax exemptions. Understanding how these two tools work together can create significant opportunities to transfer wealth to the next generation while minimizing taxes. The Annual Gift Tax Exclusion Each year, individuals can give up to $19,000 per recipient (the 2026 amount, adjusted periodically for inflation) without triggering gift tax or using any portion of their lifetime exemption. These ... Read More
The Estate-Tax Trap That Can Cost Millions: A Cautionary Tale
A Costly Oversight in Portability Planning Not all estate planning mistakes involve poor investments or forgotten documents, sometimes it’s simply a matter of incomplete paperwork. In one recent case, a married couple’s heirs were hit with over $1.5 million in unexpected estate taxes due to an avoidable oversight when filing for estate tax portability. Here’s how it happened. Portability: A Powerful, but Procedural, Tool Portability allows a surviving spouse to claim the unused portion of their deceased spouse’s federal estate tax exemption, known as the Deceased Spousal Unused Exclusion (DSUE), by filing IRS Form 706. This effectively doubles the ... Read More
Should Your Children Pay for Your Health Care?
It’s not news that nursing-care is costing an arm and a leg for Americans and a crisis is looming. Costs can run, on average, over $10,000.00 per month in California. Hundreds of thousands of people presently need that kind of care and the numbers are rising. Ten thousand “baby boomers” a day turn 65, and it’s projected that seven of ten of those people will need long-term care. By astute Long-Term Care estate planning, Botti Law Group, Ltd., reduces or eliminates the impact of such phenomenal costs on many families’ life savings. But many others who are not our clients ... Read More
5 Tips to Rethinking Your Retirement Plans
If you’re relying on a 401(k) or and IRA plan for your retirement, Kiplinger.com is suggesting it is time to rethink your financial retirement portfolio. You may have built up a significant nest egg with these plans, but it does come with serious baggage during your golden years. It is impossible to argue against the early stages of a 401(k) when employers match your contribution to the plan. You can take advantage of the tax breaks because contribution money comes out of your paycheck before calculating taxes and that money compounds every year. When you retire, however, the tax impact ... Read More
