Estate Street Partners (UltraTrust.com) affirms that if you are an individual with assets, you only have a limited time to save millions before the Tax Relief Act expires December 31, 2012.
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Marginal estate tax rates are moving back to 55% on Jan 1, 2013 as it stands currently and the smart millionaires will gift their assets to an irrevocable trust to get it out of their estate in order to maximize the amount that is going to their heirs, UltraTrust.com says. This is thwarting President Obama and his cohorts from taxing more money from the wealthy.
Merrill Lynch and Cap Gemini reported in their 2011 World Wealth Report that the U.S. had 3.1M millionaires. Furthermore, they defined household wealth by excluding their personal residence and only including liquid assets. Based on this and other research, Rocco Beatrice of UltraTrust.com, estimates 2.1 million have assets of $5 million or more.
Boston, MA (PRWEB) June 22, 2012
And based on this estimation, if all these millionaires took advantage of this tax loophole before the January 1, 2013 deadline the IRS would be giving up to $4.6 trillion in tax breaks.
Obama’s backlash for the IRS giveaways of trillions
Citing an example, Mr. Beatrice explains, “If you are an individual worth $2.5 million including your home and investments and decide to gift this amount to your children to save on estate taxes after December 31, 2012, then you or your children will have to pay $900,000 in gift taxes. If you fail to gift anything and pass away in 2013 or beyond then your children will need to pay $825,000 in estate taxes as heirs to your assets.”
“If you are asset rich, but cash poor, this means that your heirs will need to do a fire sale to raise the capital for the IRS – it happens very frequently to business and real estate owners,” warns Rocco Beatrice, Managing Director of UltraTrust.com.
If you are worth $5 million and do your gifting in January, it will cost you $1,750,000 more than it would in 2012. If you fail to gift anything and pass away in 2013 or beyond, your heirs will need to come up with $2,200,000 for estate taxes.
…the IRS would be giving up to $4.6 trillion in tax breaks to the wealthy. Until the end of 2012, each spouse may gift any amount up to $5.12 million. Assets can be gifted to an irrevocable trust such as the premium UltraTrust® irrevocable trust which eliminates probate and estate taxes upon transference of the assets to heirs after the parents pass away.
“By having a gift tax exemption level up to $5.12 million, so much money can be saved in potential estate taxes it is truly a once-in-a-lifetime tax savings opportunity that should not be passed up. If you have an estate that contains assets worth more than $1 million, this is something you should definitely take advantage of. Since the exemption will soon drop back to $1 million [on January 1, 2013], there is no better time to plan. This is just good asset protection planning; and if your advisor has not brought this to your attention, it is time to become your own advocate.”
The tax law that was in effect from President Bush will expire on December 31, 2012. This gift tax exemption reverts to $1 million at the beginning of 2013 from $5.12 million this year. In order to reinstate this exemption, it will be necessary for a new legislation to be signed by President Obama and passed by Congress. Otherwise, the gift tax exemption amount will return to $1 million as originally planned.
“With the U.S. deficits and the political attacks by Obama and the Democrats on the wealthy, it is highly likely that we will never see this tax break again in our lifetimes,” says Rocco Beatrice.
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About Estate Street Partners (UltraTrust.com):
Your assets are protected from frivolous lawsuits while eliminating your estate taxes and probate, and ensuring superior Medicaid asset protection with Estate Street Partners’ Premium UltraTrust® Irrevocable Trust. Call Estate Street Partners today at (888) 938-5872 to learn how we can save you hundreds of thousands or millions of dollars in taxes and get your peace of mind back.
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