BALFOUR LAW GROUP
Bob Balfour is a local attorney specializing in business law and estate planning. He has been a Coronado resident for 22 years and loves playing tennis, sailing, and backpacking when he is not in his beautiful office in downtown Coronado.
Bob’s favorite spot on the island is Glorietta Bay. He says that the biggest challenge working with business law and estate planning is “keeping up with changes in the law and incorporating those changes to fit my clients’ needs.” Bob says that the best things about living and working in Coronado are the small town feel and the commute. He adds, “Coronado is a great place to raise a family.”
Here he offers some changes in the law for 2014 that may be pertinent to our readers.
Any changes in estate planning law that may affect people living in Coronado?
Yes. The good news is that, beginning in 2014, the new and more favorable estate tax, gift tax and generation-skipping transfer tax exemptions have gone into effect. Under the provisions of the American Taxpayer Relief Act (“ATRA”) signed into law by President Obama January 2, 2013, the federal estate tax exemption has been indexed for inflation and therefore increased to $5.12 million in 2012, $5.25 million in 2013, and $5.34 million in 2014. The lifetime gift tax exemption has also been indexed for inflation and therefore increased to $5.34 million in 2014. The maximum gift tax rate was increased from 35% in 2012 to 40% in 2013 and future years. Finally, the generation skipping transfer tax exemption has also been indexed for inflation and therefore increased to $5.34 million in 2014, and the maximum generation skipping transfer tax rate was increased from 35% in 2012 to 40% in 2013 and future years. These unified exemptions will continue to be indexed for inflation in 2015 and later years but the tax rate will remain at 40%. In addition, the annual exclusion from gift taxes will remain at $14,000 for 2014.
Are there any other changes that will interest our readers?
“Portability” of the federal estate tax exemption between married couples has become permanent. In 2009 and prior years, married couples could pass on up to two times the federal estate tax exemption by including “AB Trusts” in their estate plan. ATRA 2010 reduced the need for AB Trust planning for federal estate taxes in 2011 and 2012 by allowing married couples to add any unused portion of the estate tax exemption of the first spouse to die to the surviving spouse’s estate tax exemption, which is commonly referred to as “portability of the estate tax exemption.” ATRA makes portability of the estate tax exemption between married couples permanent for 2013 and beyond, which means that in 2014 a married couple can pass on $10.68 million to their heirs free from federal estate taxes. To take advantage of the portability rule an estate tax return must be filed when the first spouse dies. Otherwise, the deceased spouse’s exemption will be lost.
Any news on the business law front? Or any changes affecting limited liability companies (LLCs)?
Yes. A new California law governing limited liability companies took effect Jan. 1, 2014. The law repeals the old statute and the new law may adversely affect businesses by effectively rewriting the terms of their operating agreements. I will have more on this soon.
Stay tuned for more on the LLC changes and other business law and estate planning news.
Feel free to contact Bob at his office, 619-437-1956 or visit his website for more information.
Historic Spreckels Building
1172 Orange Avenue, Second Floor
Coronado, CA 92118
Telephone (619) 437-1956
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Kellee Hearther
Staff Writer
eCoronado.com
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