Fiscal Cliff Estate Tax Fast Facts

Hype and confusion seems to surround most of the talk about estate taxes.  The legal profession seems to keep in complicated and mysterious.  While there is always some measure of complication when the federal government is involved, a specialist can always make it simplified when it is related specifically to you and your situation.

  • Estate Tax Exemption is for estate at or under $5,250,000.  This means there is not estate tax to paid on individual estates valued at this amount or less.
  • Estate Tax Rate on individual estates over $5,250,000 is 40% of all remaining assets.
  • Estate Exemption amount of $5,250,000 is indexed for inflation year after year.

Here’s what this means for you:

  • Provided you put the appropriate legal documents in place an individual estate valued at $5,250,000 is not subject to estate tax.  But it is still subject to family conflict.
  • On individual estates over $5,250,000 there are over 104 planning strategies available that allow you to pay zero in estate taxes.
  • Indexed for inflation is incentive to keep enlarging your estate with no estate tax consequences.

Most importantly, you should know exactly the value of your estate, how each asset is owned and titled, and have a written plan for how you will distribute it in light of and regardless of the estate tax laws.

One word of caution… The fiscal cliff tax law of 2013 made these laws permanent, but remember who it is we’re talking about.  When the federal government needs money there is only one way to get more of it – increased tax revenue.

Permanent does not mean coast along… it means to always have someone watching your back.

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