Quinn DeAngelis, P.C.
Kierland Business Center
15849 N. 71st Street, Suite 100
Scottsdale, Arizona 85254
Telephone: 480.281.1512

 Estate Planning Update


1.  2014 Annual Gift Tax Exemption:  $14,000 per donor, per donee.

2.  2014 Gift and Estate Tax Exemption:  $5,340,000 per donor, indexed for inflation.

3.  Marital Deduction for Transfers to U.S. Spouse:  Unlimited.

4.  2014 Generation Skipping Tax Exemption:  $5,340,000 per donor, indexed for inflation.

5.  Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.

6.  Federal Legislation:  Net investment income tax enacted as part of the Affordable Care Act, which went into effect in 2013, applies to trusts and estates. The law imposes a 3.8% tax on “net investment income”, defined as dividends, capital gains, interest, rents and royalties.  For 2014, the tax will be imposed on trust and estate income in excess of $12,150.

7.  State Legislation:  Other than the Arizona Trust Code which became effective January 1, 2009 and a few cases clarifying creditor’s rights to assets in trust, there have been few material changes in Arizona law.  Therefore, revocable trusts prepared prior to 2007 should be reviewed.  If you have not reviewed your plan since 2007, please contact me to schedule a review.

8.  Planning Issues to Review:  (i) Is my named successor trustee appropriate under the circumstances?  (ii) Is the A/B or bypass trust structure still appropriate if my assets are less than the Estate Tax Exemption?  (iii) Who should I name as the beneficiary of my Individual Retirement Account and/or 401k?  (iv) What can I do now to ease the transition upon my death or disability?

9.  Planning Opportunities:  The current exemption amounts, low valuations and the low IRS rate tables setting the minimum amount of interest and discount rate used to value annuities and remainder interests make outright gifts, gifts in trust, grantor retained annuity trusts, charitable lead trusts and sales with deferred payments extremely attractive.  These rates are trending up monthly.  In certain structures you or your spouse may be able to retain a portion of the asset transferred.  Depending upon a person’s desires and portfolio, there are several techniques available to reduce or defer estate tax obligations and if you are interested in exploring these options at this time, please contact me.

10.  Quinn News.  For more detailed information and ideas on estate planning check out our estate planning website at www.arizonaestateplanning.info and let me know what other documents or topics you would like us to address online.