Though there were many different possible outcomes, as it turns out, the fiscal cliff negotiations left us without a lot of changes to the estate tax rules.
We passed along some of the details in a previous post, but we now know the exact amount of the estate tax exclusion for 2013 after the IRS has adjusted it for inflation.
The new legislation calls for the retention of the base of $5 million that was put into place for the 2011 calendar year. In 2012 an adjustment for inflation brought this figure up to $5.12 million.
The estate tax exclusion in 2013 is $5.25 million after being adjusted for inflation again.
Because the estate tax is unified with the gift tax this amount applies to gifts that you give throughout your life using the unified exclusion along with the value of your estate.
Even if your estate is valued at less than $5.25 million you should still be aware of the estate tax because laws are subject to change. Plus, if you continue along a path of financial success your resources could cross the threshold at some point in time.
Most people just don’t have time to research every detail about the estate tax as changes are implemented. For this reason it is a good idea to speak with an estate planning lawyer on an annual basis.
Your attorney will review your existing plan, ask you relevant questions about your current financial situation, and recommend the appropriate adjustments should any such revisions be necessary.
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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