CNBC: Are you prepared for tax impact of the $68 trillion great wealth transfer? Here are some options to reduce the bite

Parsec Co-Director of Tax Services Larry Harris was quoted in a recent article from CNBC on wealth transfer strategies:

“’It really makes 2021 potentially a very consequential year for decisions,’ said Larry Harris, CFP and director of tax services at Parsec Financial in Asheville, North Carolina.”

Gifting strategies

“Although someone may currently transfer up to $11.7 million without paying federal estate taxes, the exemption returns to pre-2017 Tax Cut and Jobs Act levels after 2025, dropping by more than one-half.

If someone transfers more than the limit, they may owe up to 40% estate taxes on future gifts.

Those affected may start discussing gift strategies with their estate-planning attorney. They need to consider what they can afford, their heirs’ ability to manage money and the tax implications of gifts during life vs. at death, Harris said.

Depending on the size of the estate, families may also leverage 529 college savings plans, trusts and charitable giving to reduce their estate tax bill. However, these tactics require advanced planning.

‘You’re talking about transferring millions of dollars without any tax, estate tax or gift tax implications,” he said. “And that opportunity may well be gone.'”

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