Increasing your Income Tax Benefits

Today, income tax planning is more important than ever before. Ten to fifteen years ago, the estate tax exemption was far less, and many middle class families faced the prospect of paying high estate taxes at death. With the help of an estate-planning attorney, they implemented credit shelter trusts to maximize their estate tax savings.

Today, the exemption is now $5.34 million per person ($10.68 million for a husband and wife combined). Few middle class families today will face estate taxes as a result of this increase. However, many families still have outdated credit shelter trusts in place that they haven’t updated. Many people do not realize that these outdated plans create high capital gains taxes.

Today, families should shift their focus away from estate tax savings and should instead focus on income tax savings. For example, many families today utilize an irrevocable trust in the survivor’s estate to receive a full step-up in basis. If you have a trust that is 10-15 years old, you should visit an experienced Elder Law attorney today to update your documents. Families should consider including more favorable income tax planning in lieu of estate tax planning, as few fall over the increased exemption amount.

If you need assistance with income tax planning, or if you have questions about government assistance programs such as Medicaid, Veterans Benefits, or other Special Needs programs, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning. You can also attend our free seminars, learn more through our website at, or call us at (919) 256-7000.

Attorney Bill Alexander discusses these issues and more every Tuesday morning on W.G. Alexander & Associates’ radio program, “Asset Protection Today,” on TalkRadio 850 WPTK (AM). Be sure to listen from 9:00-10:00 AM.