• Patrick D. Newton is a North Carolina Board Certified Specialist in Estate Planning and Probate Law.

Do I have to file Gift Tax returns for the gifts to my Insurance Trust?

Filing a gift tax return for an Irrevocable Life Insurance Trust (ILIT), even if not technically required because all gifts are below the annual exclusion, is a good idea. Benefits: Filing starts the statute of limitations running on the IRS to audit the gift. Filing allows you to decide affirmatively whether Generation Skipping Transfer Tax (GST) exemption is allocated. Allocation of GST to an ILIT The GST Annual Exclusion does not apply to a gift…

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Spousal Gift Planning

People with potential taxable estates should consider maximum utilization of the Annual Exclusion. The Annual Exclusion is an amount a person (the Donor) can give to another person (the Donee) without any gift tax consequences. The current Annual Exclusion amount is $14,000 per Donee. So you could give 10 people $14,000 each, every year, without incurring any gift tax and not using your Lifetime Exemption (which allows up to $5+ million in additional gifting before…

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Irrevocable Life Insurance Trusts (ILITs)

An ILIT is just an irrevocable trust that holds life insurance. An ILIT is used to make the death benefit escape estate tax. Life insurance already escapes income tax. Avoiding both tax systems can make life insurance a very attractive investment for the future of your family. With the estate tax exemption just over $5 million and climbing, many would be client believe that estate planning and estate tax planning in particular are no longer…

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