Smart estate planning means more than just knowing who to name as a
ATLANTA, May 22, 2014 /CNW/ - Making the most out of certain tax
exemptions, like gifting, combined with taking steps to prevent costly
oversights could prevent an estate from paying more tax than absolutely
necessary, according to the professionals at Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM) (TSX:
At death, an individual's estate is potentially subject to two federal
taxes: Estate tax and Generation Skipping Tax (GST). These taxes have
the potential to consume a huge portion of the inheritance intended for
surviving family members. On top of that, many states impose a separate
estate tax of their own.
"There are basic, smart steps that you can take to mitigate the impact
of these taxes on your estate," says Paulina Mejia, managing director
for Atlantic Trust.
One way is to take full advantage of the federal exemption amount—what
each individual can give away at death without triggering estate
tax—through careful estate planning with the help of a qualified
professional, says Mejia. The federal exemption amount is currently set
at $5.34 million.
Another way to minimize federal estate taxes is to make annual exclusion
gifts, she says. Currently, individuals generally can give up to
$14,000 per year to as many recipients as they like without incurring a
gift tax. Married couples can combine their annual exclusion amount to
give up to $28,000 per person tax-free—a practice known as
gift-splitting. These gifts do not count against the $5.34 million
"Annual exclusion gifts are a simple but potentially powerful
estate-planning tool," says Mejia.
For example, a couple with a combination of 10 children and
grandchildren who gift-split can give away $280,000 per year ($28,000
per person times 10 people) using their annual exclusion. Assuming a
growth rate of 6 per cent, that sum would be worth $10.9 million in 20
years, with all of the appreciation free of estate tax. At a tax rate
of 40 per cent (the rate currently in effect), that represents a
federal estate tax savings of more than $4.3 million.
For an overview of basic estate planning terms and strategies, read "Basic Estate and Gift Planning: The Most Important First Step." Atlantic Trust provides additional estate planning resources on its Online Resource Center.
The tax information contained herein is general and for informational
purposes only. Atlantic Trust does not provide legal or tax advice, and
the information contained herein should only be used in
consultation with your legal, accounting and tax advisers. To ensure
compliance with requirements imposed by the IRS, we inform you that any
U.S. federal tax advice contained in this communication (including any
attachments) is not intended or written to be used, and cannot be used,
for the purpose of (i) avoiding penalties under the Internal Revenue
Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
About Atlantic Trust
Atlantic Trust is one of the nation's leading private wealth management
firms, offering integrated wealth management for high-net-worth
individuals, families, foundations and endowments. The firm considers
clients' financial, trust, estate planning and philanthropic needs in
developing customized asset allocation and investment management
solutions. Experienced professionals deliver a broad range of
solutions, including proprietary investment offerings and a robust open
architecture platform of traditional and alternative managers. Atlantic
Trust operates in 12 full-service locations throughout the U.S. with
$24.0 billion in assets under management (as of December 31, 2013). For
more information, visit www.atlantictrust.com.
CIBC is a leading Canadian-based global financial institution. Through
our Retail and Business Banking, Wealth Management and Wholesale
Banking businesses, CIBC provides a full range of financial products to
individual, small business, commercial, corporate and institutional
clients in Canada and around the world.
CIBC Wealth Management provides relationship-based advisory services and
an extensive suite of leading investment solutions to meet the needs of
personal, institutional and high-net-worth clients through an extensive
distribution network, that includes CIBC Private Wealth Management,
CIBC Wood Gundy and CIBC Investor's Edge. Our asset management, retail
brokerage and private wealth management businesses combine to create an
integrated offer, delivered through nearly 1,500 advisors across
Canada. In addition, CIBC Asset Management provides global money
manager services to institutional and high-net-worth clients and
industry-leading retail investment solutions through our two mutual
fund families - CIBC and Renaissance - and the CIBC family of managed
SOURCE: Atlantic Trust Private Wealth Management
For further information:
Media inquiries: Caroline Van Hasselt, Director, CIBC External Communications and Media Relations, (416) 784-6699, firstname.lastname@example.org or Carolyn Donnelly, Atlantic Trust Director of Marketing, (404) 881-3417, email@example.com.