The taxing of estates is to this writer, one of the most confusing and misunderstood sections of the tax code. You can sit for hours reading the IRS' website on the subject and still be lost. I have searched for some great links that I feel will explain in simple language all of the aspects of estate taxation.
Anyone who has accumulated wealth, no matter what age, should educate themselves on what will happen with their estate should they not plan ahead. I strongly suggest that everyone take some time and read some of these links.
Education and knowledge are powerful tools and the following links contain very valuable information.
Suggested Reading
How to Calculate the Value of Your Gross Estate
What Value of an Asset is Used for Estate Tax Purposes?
How to Calculate Your Net Worth
Definitions
Charitable Lead Trust
Charitable Remainder Trust
Estate Tax
More Defintions
Exemption from Estate Taxes
Gross Estate
Unlimited Marital Deduction
About Estate Taxes
Overview of Taxes That Affect an Estate
Overview of Current Federal Estate Tax Laws
What is the Future of the Federal Estate Tax?
How to Calculate the Value of Your Gross Estate
What Value of an Asset is Used for Estate Tax Purposes?
The above links are courtesy of ABOUT.COM and author William Perez, a highly respected tax professional and one of my daily subscription authors.
Showing posts with label estates. Show all posts
Showing posts with label estates. Show all posts
Wednesday, November 12, 2008
What Obama Has In Store For Your Estate!
Now that the presidential election is settled, there's no doubt that president-elect Obama and Congress will be addressing the fate of the federal estate tax very soon. Why? Because next year the federal estate tax exemption will increase from $2,000,000 to $3,500,000 and in 2010 the federal estate tax will completely vanish. Then, in 2011, the federal estate tax will return but the exemption will only be $1,000,000.
During his campaign, then Senator Obama was against full repeal of the federal estate tax in 2010 and instead favored making the $3,500,000 exemption permanent. But couple the fact that then Senator Obama's estate tax plan was put together well before the current economic crisis with the Democrats view that repeal of the federal estate tax would only benefit the super wealthy and take needed funds out of the federal budget, and I have to wonder if we're only a year away from the estate tax exemption reverting back to $1,000,000. And what about portability of the federal estate tax exemption between spouses? Forget about it, at least for now.
With this in mind, while there's been a lot talk about "Obama proofing" your investments and small business, I haven't heard anything about "Obama proofing" your estate plan. What do I mean by this? Here's a few things to consider:
Planning for a $1,000,000 estate tax exemption;
If you're married, taking the steps necessary to maximize the use of both spouses' estate tax exemptions through the use of AB Trusts;
Whether you're married or single, exploring the options for minimizing your estate tax bill through gifting and advanced estate planning;
Whether you're married or single, setting up an Irrevocable Life Insurance Trust to provide readily available cash to pay estate taxes - this needs to be done while you're younger and in good health, and the good news is that if the insurance isn't needed to pay estate taxes, then you'll be leaving a windfall of cash for your loved ones; and
Monitoring your estate plan on a yearly basis to insure that it still meets your needs and addresses your estate tax liability.
Additional reading resources courtesy of ABOUT.COM:
What is the Future of the Federal Estate Tax?
How to Minimize Estate Taxes
What Are the Options for Paying Estate Taxes?
What is an AB Trust?
What is an Irrevocable Life Insurance Trust?
During his campaign, then Senator Obama was against full repeal of the federal estate tax in 2010 and instead favored making the $3,500,000 exemption permanent. But couple the fact that then Senator Obama's estate tax plan was put together well before the current economic crisis with the Democrats view that repeal of the federal estate tax would only benefit the super wealthy and take needed funds out of the federal budget, and I have to wonder if we're only a year away from the estate tax exemption reverting back to $1,000,000. And what about portability of the federal estate tax exemption between spouses? Forget about it, at least for now.
With this in mind, while there's been a lot talk about "Obama proofing" your investments and small business, I haven't heard anything about "Obama proofing" your estate plan. What do I mean by this? Here's a few things to consider:
Planning for a $1,000,000 estate tax exemption;
If you're married, taking the steps necessary to maximize the use of both spouses' estate tax exemptions through the use of AB Trusts;
Whether you're married or single, exploring the options for minimizing your estate tax bill through gifting and advanced estate planning;
Whether you're married or single, setting up an Irrevocable Life Insurance Trust to provide readily available cash to pay estate taxes - this needs to be done while you're younger and in good health, and the good news is that if the insurance isn't needed to pay estate taxes, then you'll be leaving a windfall of cash for your loved ones; and
Monitoring your estate plan on a yearly basis to insure that it still meets your needs and addresses your estate tax liability.
Additional reading resources courtesy of ABOUT.COM:
What is the Future of the Federal Estate Tax?
How to Minimize Estate Taxes
What Are the Options for Paying Estate Taxes?
What is an AB Trust?
What is an Irrevocable Life Insurance Trust?
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