Question

The Wealth Transfer Decision"

Imagine that you are an estate planner and a friend is seeking advice regarding leaving property to his children. He has accumulated approximately $1 million of property that he would like to leave to his children. However, there is a concern that the estate taxes will absorb most of these funds. Develop a wealth-transfer plan that would minimize the tax consequences to the donees. Provide specific recommendations.

I need this to be an original answer and not like someone else's

Answer 1

Answer

For 2016, IRS has announced an exemption for individual upto $5.45 million. This allows individual to transfer his property upto $5.45million to his heirs with out paying any federal tax or estate tax. Here in the given question. Individual whose property approximately $1 million which much below than actual exemption limit of $5.45million. Hence he doesnot require to pay any tax on property transferred to his 3 children. No further wealth tax planning is required.