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After careful review of the COVID-19 environment, the law firm of Chayet & Danzo, LLC, will be conducting in-person appointments in our offices on a limited basis and with strict social distancing protocols.

During this time, our team will continue to diligently work remotely on all client matters and will maintain communication through email, telephone, and video conferencing. Our main office number, (303) 355-8500 will continue to be answered during our normal business hours of 8:00 a.m. to 5 p.m. Monday - Thursday and 8:00 a.m. to 4:00 p.m. on Fridays.

This decision to have limited appointments in-office while following strict social distancing protocols is in the best interest and health of our team, clients and community.

We will continue accepting new clients during this period as well as fully servicing our existing clients.

We wish you and your family continued health during these unique and challenging times.

Compassion, talent and dedication: guiding colorado families and Their Trusted Advisors During Times of Need

Gift and estate tax planning for wealthy Colorado taxpayers

At our law firm, we provide estate planning advice and services to Colorado clients at all levels of wealth, but for those at upper tax brackets, it is important to evaluate if and how federal gift and estate taxes could impact choices to make lifetime gifts as well as estate planning choices to minimize tax liability. 

The estate tax is assessed on money and property transferred to beneficiaries or heirs from highly valued estates and even then, a large part of an eligible estate is exempt from tax.


Tax Cuts and Jobs Act of 2017 

Recent comprehensive federal tax reform legislation had a major impact on the estate tax. Specifically, it raised the size of an estate exempt from federal estate tax from $5.49 million in 2017 to $11.18 million in 2018 (double for married couples), adjusted for inflation annually going forward. 

Taxable estate 

When a person dies, his or her taxable, net estate must be calculated. First, add together the fair market value of all assets at death (money, real estate, vehicles, personal property and others) to determine the size of the gross estate. Then, subtract total liability (loans, mortgages, credit cards and administrative expenses of the estate as well as certain IRS-approved charitable trusts, and transfers for the benefit of a citizen spouse) to arrive at the taxable value of the estate for estate tax purposes. 

Interaction between lifetime gifts and estate tax 

Finally, add back into the taxable estate the value of any lifetime gifts that were over the annual amount exempt from gift tax and for which gift tax was not paid. 

Lifetime gifts can reduce the overall estate to avoid estate taxation. Gifts can also be meaningful from a personal standpoint as the taxpayer can provide needed support or a thoughtful gift for a child, grandchild or other loved one. 

Beginning in 2018, a U.S. taxpayer may give up to $15,000 (in cash or in property) tax free as a gift to any individual annually, with no limit on the number of recipients. For a married couple together, the limit is $30,000. Federal gift tax is due for amounts gifted above these limits and if not paid during the taxpayer’s life, must be added back into the size of the taxable estate after death. 

Related issues 

Other techniques can help reduce future estate tax liability like the creation of certain kinds of trusts. Consulting an experienced legal advisor is especially important if estate and gift taxes could present issues for your estate. To further complicate an already complex topic, the new, higher exemption is only in effect through 2025, unless additional legislation changes this temporary provision.

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