Rancho Santa Fe, Palm Springs and Newport Beach Estate Planning Attorney - Estate Taxes and How to Reduce Them

If you really want to reduce estate taxes in California, it doesn't matter whether you live, Mission Valley, La Jolla, Del Mar, Cardiff, Solana Beach, Carlsbad or San Marcos, for instance in San Diego, CA, or Newport Beach, Huntington Beach, Newport Coast, Crystal Cove, Laguna Beach, Irvine, Anaheim Hills, Yorba Linda or Corona del Mar as an example in Orange County, California, Rancho Cucamonga or Ontario in the Inland Empire, or even in Palm Springs, Palm Desert, Rancho Mirage, or La Quinta in the Coachella Valley. Trusts are a useful tool for estate planning lawyers to reduce probate expenses and estate taxes for individuals anywhere in California or the U.S. as long as you have a sizeable estate.

The current estate tax in 2008 affects only people who die with an estate in excess of two million dollars. In 2009, that amount will increase to three and a half million dollars and in 2010, the estate tax is repealed. That's the good news.

If, however, the estate tax repeal is not extended by 2011, the estate tax will kick in again. The worse news is that in 2011, if the estate tax repeal is not extended, the estate tax will kick in at one million dollars. The current federal estate tax rate is a whopping 47 percent. That stays the same in 2009 but is repealed in 2010.

For married couples, it's when the second spouse dies, that estate tax can be a problem. When the first spouse dies the property passes to the surviving spouse tax free. Not so, when the second spouse dies.

One of the most important changes in estate planning is what happens to the basis of inherited property. Currently, when you inherit property, your tax basis when you sell that property is the market value of the property on the former owner's death. The basis for that property is thus stepped-up to the value on the former owner's death as opposed to the value of the property when the former owner bought the property.

This rule will also end in 2010. From then on, if you inherit property, you can use the stepped-up basis only for the first 1.3 million worth of the property. For any excess value, the basis will be the former owner's basis or the value on that person's death, whichever is smaller. Thus, there will need to be estate planning on which assets to take this stepped-up basis.

If you have an estate in excess of $2 million, one of the best ways to avoid estate tax is to give some of your property away now. You can make gifts of $12,000 yearly to any individual you choose, and to as many individuals as you choose. Couples can give twice that amount yearly to any individual. Any gifts you give to your spouse, so long as he or she is an American citizen, are tax-free. If your spouse is not an American citizen, the current tax-free amount on gifts is $12,000. Annual gifts are based on a calendar year.

Estate planning is exactly what the name says, a way to plan your estate so you can cut your estate taxes. However, to make the right moves you have to keep up on the changes in the law, which an estate planning attorney is able to do. 

If you have a trust, will, or estate planning issue in San Diego, Newport Beach, Irvine, Orange County, La Jolla, in the Inland Empire, Los Angeles, Palm Springs or anywhere in Southern California, we have the knowledge and resources to be your Palm Springs Estate Planning Lawyer and your Newport Beach Trust Attorney. Be sure to hire a California law firm with estate planning and trust law experience who can serve areas such as Los Angeles, Palm Springs, Palm Desert, Anaheim, Irvine, Beverly Hills, Malibu, Newport Beach, Beverly Hills, Carlsbad, Corona del Mar, Laguna Beach, Huntington Beach, Santa Ana, Rancho Cucamonga, Ontario, Fullerton, Del Mar, San Diego, Orange County, San Luis Obispo, Buena Park, La Jolla, Oxnard, Ventura, La Quinta, and Santa Barbara so you are properly represented and get the compensation you deserve.

If you have a trust, will, or estate planning issue of any kind, call the Law Offices of R. Sebastian Gibson, or visit our website at http://www.sebastiangibsonlaw.com  and learn how we can assist you.