Summit Financial Advisors logo

Jamie Letcher

VP, Wealth Management

 

Summit Financial Advisors

Located at Summit Credit Union

401 S. Yellowstone Drive

Madison, WI 53719

 

Phone:  608-271-1012

 

Email: james.letcher@lpl.com

September/October 2024

Take Advantage of Higher Exemptions

hourglass with pencil on notebook , time passing concept .

Lifetime exemption limits for transferring wealth are historically high, but their end may be on the horizon. Current lifetime exemption amounts are set to expire on December 31, 2025, unless Congress acts to extend them. Reviewing your wealth preservation strategies with your financial, tax and legal professionals will help ensure you’re taking full advantage of the opportunities available to you. Consulting your tax professional can help prevent unwelcome surprises.


The Federal Estate Tax Exemption
Individuals can gift up to $13.61 million to their heirs free of federal estate taxes. This amount doubles to $27.22 million when a spouse joins in the gift.


The GST Tax Exemption
The generation-skipping transfer (GST) tax applies when grandparents directly transfer assets to their grandchildren or other individuals without first leaving the assets to their children. However, the generation-skipping transfer tax exemption is an amount that can be directly transferred to grandchildren, or into a GST trust for their benefit, without incurring federal GST taxes.


Annual Gift Tax Exclusion Amount
Individuals can gift up to $18,000 ($36,000 for a married couple) to an unlimited number of recipients free of federal gift taxes. Recipients pay no federal taxes on the gifts. Gifts greater than the annual exclusion amount will count against the giver’s lifetime gift tax exemption.


Other Exceptions
Payments made directly to a qualifying educational institution for a child’s or grandchild’s tuition are not subject to federal gift tax. In addition, direct payments made to a medical provider or medical institution for an individual’s care are not subject to gift tax.


Trusts Offer Advantages
Trusts may be a useful vehicle for individuals to take advantage of annual gift tax exemptions and exclusions. Lifetime irrevocable trusts allow grantors to transfer assets into the trust using their lifetime exemption and exclusion amounts, in lieu of making cash payments to beneficiaries. Grantor-retained annuity trusts (GRATs) allow grantors to transfer assets to recipients, while reserving the right to receive annual annuity payments. Assets remaining in the trust pass tax free to beneficiaries.

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Summit Credit Union and Summit Financial Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Summit Financial Advsiors, and may also be employees of Summit Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Summit Credit Union or Summit Financial Advisors. Securities and insurance offered through LPL or its affiliates are:

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