IRA Beneficiary
26. Individual Estate Tax Exemption
Estate taxes have come up several times in this presentation. I'd like to take a few moments and explain what they are - and why you should care.
Estate taxes are different from, and in addition to, probate costs (which can be avoided with a revocable living trust) and income taxes.
When you die, your estate will have to pay estate taxes if its net value is more than the "exempt" amount set by Congress at that time.
For example, in 2008, the federal estate tax "exemption" is $2 million. Notice that the estate tax is scheduled to be "repealed" in 2010, but it comes back in 2011...with the exemption back at $1 million.