ESTATE PLANNING: Catching up on readers' questions

2013-12-28T09:48:00Z ESTATE PLANNING: Catching up on readers' questionsChristopher W. Yugo Times Business Columnist
December 28, 2013 9:48 am  • 

Q: How much can I gift this year? Does the amount go up in 2014?

A: You can give up to $14,000 in 2013 to anyone individual. However, it's important to understand the $14,000 isn't a limit but rather a triggering event. If you gift $14,000 or less to any one individual, there is no tax reporting required.

However, if you gift more than $14,000, you must report the gift on a Federal Gift Tax Return. Chances are you can elect to use up some of your lifetime exclusion, so you won't have to pay any gift tax. However, you are required by law to report the gifts.

There are some exceptions relating to certain gifts relating to medical care and educational expenses, so you may want to speak with your accountant if you plan on making sizable gifts. Also, keep in mind that the triggering event is a cumulative amount for all gifts. Contrary to the believe of some of my clients, there is no such thing as a "Christmas Gift" exclusion. In other words, if you make gifts in excess of $14,000, plan on filing a return.

Finally, although there was an increase in the excludable amount in 2013, there is no increase in 2014. There is however an increase in the lifetime Estate and Gift Tax exclusion in 2014 from $5.25 million to $5.34 million.

Q: What happens if the person named in the will won't open an estate?

A: No one named in a will is required to serve as personal representative. It's nice to think that the person that you name in the will accept his or her appointment, but there is no requirement they do so.

I think it's a good idea to have a conversation with the person that you intend to name in your will prior to execution. Although it has been my experience that if you name them, they will serve, I still think you should approach them first.

If a named individual can't or won't serve as personal representative, hopefully one of the successor named individuals will serve. However, if no one steps up, there is a code provision that lists, by preference, parties who can serve.

Generally speaking, it is by degree of relationship. After the named personal representative, the surviving spouse who is a devisee in the will, would be next in line. If they fail to act, any devisee in the will would be next in line. Eventually, it ends with a "qualified person." If you have a lazy named personal representative and a devisee wants to rush things along, they can petition a court.

Opinions are solely the writer's. Christopher W. Yugo is a Crown Point attorney. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321 or to Yugo's information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.

Copyright 2014 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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