Taxes are everywhere. In addition to income taxes, most of us have to pay sales taxes, real estate taxes, and payroll taxes. But, fortunately, many of us no longer have to worry about the payment of federal estate taxes.
Take a look at the table set forth below – it indicates the changes that have been made to the federal estate tax laws since 1997.
Estate Tax Exemption
Top Estate Tax Rate
The changes noted above are substantial, and all for the better. To get a better idea of what this table means: In 1997:
1. Only the first $600,000 of assets ($1,200,000 of assets for a married couple) could pass free of federal estate taxes.
2. If your assets were worth more than this amount, the excess would be taxed; and the maximum federal estate tax rate was 55%.
1. Today, the first $5,340,000 of assets ($10,680,000 of assets for a married couple) can pass free of federal estate taxes.
2. If your assets are worth more than this amount, the excess will be taxed; but the maximum rate of tax has been lowered from 55 percent to 40 percent.
You should take a look at the date that your Will was signed. If it was signed at a time when the value of your assets exceeded the estate tax exemption amount, it probably contains a number of complicated provisions that were written for the specific purpose of minimizing the amount of federal estate tax that was projected to be due at your death. These provisions can now be eliminated.
All of us like to keep things simple. The good news is that if your federal estate tax worries have gone away (due to the changes made to the federal estate laws), you can (and should) simplify your Will. If you have any questions about federal estate taxes please contact Maurice Offit at:
ABOUT MAURICE OFFIT
firstname.lastname@example.org | 301.575.0308 Maurice Offit is an estate planning attorney, co-founder of Offit Kurman Attorneys at Law and a member of the firm’s Management Committee. Mr. Offit counsels a large number of clients who share an interest in minimizing estate taxes and asset protection from the claims of creditors. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.