VIEWS: 10 PAGES: 2 CATEGORY: Legal POSTED ON: 11/19/2011
In 2011 and 2012, your estate will pay up 35% of any assets that go over your federal tax exemption amount.
Who Needs to Plan for the Federal Estate Tax? In 2011 and 2012, your estate will pay up 35% of any assets that go over your federal tax exemption amount. In 2013, your estate will pay up to 55% (60%, in some cases.) Some people think that they don’t need to plan to avoid the federal estate tax because in 2011 and 2012, the exemption is $5 million. However, there are five good reasons to plan NOW to avoid this voluntary tax. 1. The federal estate tax is a tax on everything you own or is owed to you at your death. Add up everything including life insurance, retirement plans, business assets, investments, bank accounts, and personal property. It’s likely higher than you think. 2. The federal estate tax is a huge bite out of your estate; wouldn’t you like to avoid having up to 55% taken by the government, when it can be avoided (or at least minimized, depending on your other goals)? 3. You may have used your federal estate tax exemption during your lifetime and anything you transfer at your death will be subject to the tax. 4. The exemption amount as of January 1, 2013 is only $1 million and a lot of families will be losing a lot of money, if they don’t have good estate planning in place. 5. Current, 2011, law includes “portability” which offers some federal estate tax minimization to married couples without the usual AB tax planning trusts and without proper asset ownership. However, portability disappears at the same time the exemption is reduced to $1 million; either you or your spouse would have to die in 2011 or 2012; the executor of the estate would have to file a federal estate tax return, indicating that the surviving spouse can use any unused exemption amount of the deceased spouse; and, if you or your spouse get remarried and that spouse dies first, the original spouse who died is replaced. Portability is a mess; do good estate planning with a qualified estate planning attorney to avoid or minimize the federal estate tax. Experienced estate planning attorneys Forest Hills NY of Davidov Law Group offers estate planning and business planning resources to residents of Forest Hills NY. To learn more about these free resources, please visit http://www.davidovlaw.com today.
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