Federal Gift, Estate, and Generation-Skipping Tax Planning

“The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny.”

– Calvin Coolidge

Federal Gift and Estate Tax Planning

One of the wonderful things about living in Florida is that Florida does not generally impose a personal income tax, inheritance tax, gift tax, estate tax, or generation-skipping tax on its citizenry.  On the other hand, the federal government imposes income taxes, gifts taxes, estate taxes, and generation-skipping taxing upon some of its wealthiest citizens.  However, Congress and, in some instances, the Internal Revenue Service, has authorized the use of various mechanisms to avoid these taxes.   It is through these mechanisms that planning can be done to avoid or minimize the imposition of taxes.

Generally speaking, the federal gift and estate tax, imposes a tax of forty percent (40%) on all taxable gifts and assets of decedent’s taxable estate in excess of the basic exclusion amount, which, in the year 2021, is $11.7 million.  Please note that this is an extreme generalization and over-simplification, as various issues related to portability, deductions, exemptions, citizenship of the decedent or the beneficiaries, and other issues may drastically affect the tax that is ultimately imposed.  The important takeaway is that proper consideration must be given to these issues, especially where a client’s assets have a possibility of being subject to these taxes either presently or in the future.

In formulating a client’s estate plan, it is imperative that the tax consequences of that plan are considered and discussed with the client.  Educating the client as to the tax consequences of his or her estate plan allows the client to make an informed and autonomous decision, giving them true decision-making power over their planning.

Generation-Skipping Tax Planning

At The Merriman Law Firm, P.L.L.C., we have experience in tax planning with regard to the federal gift, estate and generation-skipping taxes, as well as planning with regarding to income taxation as it pertains to wills, trusts and estates.  Robin D. Merriman II, J.D., LL.M., B.C.S., earned a Master of Laws in Taxation from New York University School of Law and has been certified by the Florida Bar as an Expert in Wills, Trusts and Estates.  Robin has experience handling estate and tax planning matters for high-net worth individuals.  For these individuals, he has assisted with tax planning related to the Federal Gift, Estate, and Generation-Skipping Taxes and in completing Federal Gift Tax Returns (IRS Form 709’s) for those clients who have made taxable gifts as part of their planning.  He has experience planning the estates of business owners, including setting up various business entities, and he has prepared real estate documents and completed real estate transactions as part of his estate planning practice.