There are strategies that you may use to transfer some of your estate tax free to your children. You may need to use multiple strategies if your estate is in the 5 million dollar range. A trust is a must. Annual gifts. The Oregon Estate tax credit is 1 million this year. So in order to exceed that amount, you need to do more than just the trust. The Oregon legislature had a bill that would have increased that exemption to 1.5 million, but it didn't get through. Though it may next session. Federal law will likely change as well in the next two years.
As you can see, it will be important to retain an attorney who is experienced with estates and trusts and estate tax issues. You could be exposed to a lot of unnecessary taxes if you retain a lawyer who doens't know or understand current opportunities, or who doesn't keep up on law changes in the future. My suggestion is to not worry about finding the least expensive professiona. Stay away form trust "kits" and "paralegals". If you want this done right, hire the right person.
You should, as suggested, find a highly competent estate planning attorney. You obviously have significant assets and an interest in minimizing estate tax. The gift tax is only one consideration; there are other considerations, such as the stepped up basis issue. You may want to consider annual gifts, which are basically considered exempt and do not reduce your lifetime credit/exemption. Thes can be given to anyone, and each has a separate exemption each year. Gifts can be "split with a spouse, allowing the total gift to be twice as much as one person would be allowed as an exempt gift.
Gifts of partial interests can sometimes be discounted because of control issues. Get some expert help and you most likely will save much more in taxes than you will pay in fees.
And, finally, remember that you will need to file gift tax returns if you do get involved in aggressive gifting.
This comment is general in nature and is not intended as legal advice. It does not create an attorney client relationship and obviously is not confidential. You should contact an attorney in your area who can review with you all of the relevant facts and give you specific legal advice.
Mr Harris offers sound advice here. Do not even think about being your own attorney here, let alone an estates and tax attorney; there is just too much involved. There are numerous tax strategies that can be used here such as family limited partnerships, generation skipping trusts, defective grantor trusts, etc. that need to be explored based on your family needs and tax minimazation desires. There are also basis implications in making current gifts. Get an estates attorney BEFORE you do anything that you or your family will regret down the road.
Hope this helps. Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is firstname.lastname@example.org . For further tax advice visit his website at www.sjfpc.com . and blog at >
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
I agree with the other attorneys, This is a complex tax question that has serious irreversible tax consequences. You should not undertake this without consulting with a local attorney first.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.