Estate Planning – Taxation
Gift, estate, and generation-skipping transfer taxes are taxes on the transfer of property which includes both lifetime gifts and gifts made at death. Federal estate taxes apply when a person’s cumulative lifetime gifts plus bequests at death exceed the federal estate tax exemption ($5.34 million in 2014). For the second spouse that dies, the exemption can be increased by the amount of exemption not used at the first spouse’s death. The federal estate tax rate for the current year (2014) is 40%, with a credit given for any gift taxes that a person paid on their cumulative lifetime gifts.
Oregon and Washington also have estate taxes that need to be considered. The Oregon estate tax applies to estates over one million dollars, and the Washington estate tax applies to estates over two million dollars. It is important to note that the Oregon estate tax and Washington estate tax rates are significantly lower than the federal estate tax rates. Federal generation-skipping transfer taxes (“GST”) apply when you make lifetime gifts, or a combination of lifetime gifts and bequests, to persons two or more generations younger than you totaling 5.34 million dollars or more (in 2014). Neither Oregon nor Washington imposes a GST tax.
As part of your estate planning, our attorneys will provide strategies to take advantage of exemptions, exclusions, and deductions from the above mentioned taxes.