$5 Million Exemption

January 1, 2016   Estate Administration

What's Happening in Estate Planning

On December 17, 2010 President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.This legislation had some surprises for those who had been following the process. In addition to extending unemployment benefits, current income tax rates (the Bush tax cuts) were extended for all taxpayers for two years, and the estate tax was also extended for two years -- with a $5 million exemption and 35% tax rate.Here are the highlights of this law and how these changes can affect your estate planning through 2012.Estate Tax Exemption and Tax RateYour estate will have to pay federal estate taxes if its net value when you die is more than the exempt amount in effect at that time. For 2011 and 2012, the individual exemption is $5 million (adjusted fo...
December 28, 2011   Estate Planning

How to Get The Most Out of the Estate Tax Exemption

Your estate will have to pay federal estate taxes if its net value when you die is more than the exempt amount set by Congress at that time. In 2011 and 2012, the federal exemption is $5 million (adjusted for inflation in 2012) and the tax rate is 35%. If Congress does not act again before the end of 2012, the exemption in 2013 will be $1 million and the top tax rate will be 55%. Some states have their own death tax, so your estate could be exempt from federal tax and still have to pay state tax.Year of Death Exempt AmountTop Tax Rate2011 and 2012$5 million (Adjusted for inflation in 2012)35%2013 and thereafter$1 million55% To determine the current net value of your estate, add your assets then subtract your debts. Be sure to include your home, business interests, bank accounts, investment...
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