Charitable Remainder Trusts
20. Beneficiary Analysis: Without CRT
As we showed you earlier, if the Brodys sell the stock themselves, they would have $440,000 left to re-invest after paying the capital gains tax.
There may also be estate taxes when they die. If we assume in our example that the Brodys will have to pay estate taxes at a rate of 35%, $154,000 will go to pay federal estate taxes,* leaving the Brody children with $286,000.
In 2011 and 2012, the federal estate tax exemption is $5 million with a 35% tax rate. If Congress does not act by the end of 2012, on January 1, 2013 the exemption will be $1 million with a 55% top tax rate. Also, some states have their own death/inheritance tax, so you could be exempt from the federal estate tax and still have to pay a state tax.