The subject of the estate tax is hotly debated in some circles and there are those who feel as though this federal levy should be repealed. In fact, there have been several bills introduced into the House of Representatives recently that call for a repeal of the estate tax.
This tax is often called the “death tax” and when you look into it you can see why. The resources that are going to comprise your estate were accumulated after you paid taxes. If you take some of your after-tax earnings and place them in the bank they are not taxed again during your lifetime just because you have it.
But if your savings are sufficient, when you die and pass them on to your loved ones they are subject to the estate tax. The only thing that changed is that you died. So in a very real sense this is a tax that is imposed upon you because you passed away, thus the term “death tax.”
Aside from the fact that the estate tax is imposed on resources that have already been taxed, it carries a rate that many people find to be excessive. Right now that rate is 35%, but it is scheduled to rise to a rather jaw-dropping 55% in 2013. Plus, it is selectively imposed rather than being a tax everyone must pay and this is another reason why many people call for a repeal.
Those who would like to see the estate tax repealed make a pretty strong case. However, the estate tax has been around for quite some time and there have been those who have called for a repeal all the while.
The reality is that the tax exists and you have to prepare for it in advance to mitigate your exposure. The best way to do that is to get together with an experienced Ashland or Northern Kentucky estate planning attorney to devise a plan that provides you with maximum estate tax protection.
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.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022
