Time marches on, and as it does changes invariably take place and a lot of them are going to impact your estate plan. Some of these twists and turns are specific to you and your own life. Divorce and remarriage are prime examples, and these are very common occurrences during our current era.
But there are other events outside of your personal control can be relevant to your ongoing estate planning efforts. One of those is changes to the estate tax.
As of this writing the maximum rate of the estate tax is 35%, and the estate tax exclusion is $5 million. These parameters are in place due to the enactment of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
This act is going to sunset at the end of next year. Under the existing laws, the estate tax exclusion is going to be reduced to just $1 million after the expiration of this tax relief act. Accompanying this reduction in the exclusion amount will be an increase in the estate tax rate. Instead of the 35% that we are faced with on this day, the maximum rate of the estate tax will go up to a whopping 55% at the beginning of 2013.
What this means to you is that if Congress does not act, your estate is worth more than $1 million, and you have no reason to expect that you will be passing away before the end of next year, you may want to take action to gain estate tax efficiency. To gain an understanding of the options that are available to you in response to these pending estate tax changes, make an appointment to speak with an experienced, licensed estate planning attorney.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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