Don’t miss your chance to make year-end gifts!

With the end of the year approaching, now is the time to consider making gifts to lower your federal and state tax liability. If you are interested in making gifts to your children or grandchildren (or to qualifying trusts for their benefit) and/or charitable gifts, you should do so as soon as possible and must do so by the end of 2015 if you intend to take advantage of the annual exclusion from gift tax for 2015.

Goodwin Procter partners Mary-Kathleen O’Connell and Susan L. Abbott recently crafted a Client Alert on “Year-End Opportunities” that provides the full picture of what you should be considering.

The gist of the Alert is, as 2015 comes to a close, you might want to consider making gifts to minimize your potential tax liability and to maximize your use of available exemptions in order to reduce your ultimate estate tax liability. With the federal estate tax rate at 40% on the amount that your estate exceeds your available exemption amount, it’s worth taking steps to reduce your potential liability. In 2015, the estate tax and gift tax exemption amounts are $5,430,000. 

For Massachusetts residents, estates valued at more than $1 million will be subject to a Massachusetts estate tax if the decedent was a resident of Massachusetts at his or her death. Massachusetts does not have a separate gift tax and therefore, lifetime gifts will reduce future Massachusetts estate tax liability.

Read the full Client Alert here.

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