With the end of the year approaching, and the possibility of further changes in the federal estate tax looming, many families have inheritances and legacies on their mind. And among well-off boomers, the idea of providing something for their heirs remains a strong motivator. Fifty-five percent of boomers with $3 million or more in investable assets consider it important to leave their kids a financial inheritance, according to most recent U.S. Trust Insights on Wealth and Worth study.
That’s a nice sentiment, for sure. But many advisers and wealth managers argue that leaving an inheritance, if not done right, can do more harm than good.
With only about three months left in the calendar year – and only three months remaining before major changes in tax laws are expected to kick in – you’re likely to hear a lot about year-end tax planning. An article in the current issue of Financial Planning magazine is a good reminder that it’s not too late to take advantage of some surprisingly generous rules.
The Tax Relief Act of 2010 contained some unprecedented benefits for taxpayers: In particular, the gift-tax exemption jumped from $1 million to $5 million. That means individuals can bequeath the latter amount without paying a penny in taxes. The catch: That change and others expire on Dec. 31…
Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.