In 2012, individuals are allowed to make lifetime gifts of up to $5,133,000, and couples are allowed to make lifetime gifts of up to $10,266,000 before the 35% marginal rate on gifts are applicable. The reason gift and estate taxes are often discussed at the same time is because any amount gifted during one’s lifetime will minimize the amount of their exemption.
For example, if an individual gifted $5,133,000, still had an estate worth $10,000,000 post-gift, and dies later this year, they would be subject to a marginal rate of tax of 35% of $10,000,000. In other words, you can’t double dip in both the estate and gift tax.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified estate tax lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local estate tax attorney to discuss your specific legal situation.