Update your estate planning
Tax Tip of the Week
April 29, 2013
Update your estate planning
Have you been putting off your estate planning due to uncertainty in the tax law? Then you'll be happy to hear much of the uncertainty has been eliminated by the American Taxpayer Relief Act of 2012.
Here are three rules the Act made permanent, beginning in 2013.
- The basic federal estate tax exemption is $5 million, adjusted annually for inflation. For 2013, the exemption is $5.25 million, meaning you can transfer assets up to that amount, estate tax-free, to your heirs under your estate plan or through gifts during your lifetime.
- "Portability" can increase your exemption. Portability is an election you make as an executor to apply the unused portion of one spouse's basic exemption to the second spouse's estate. The potential benefit: no estate tax on $10.5 million of assets.
- The maximum estate tax rate is 40%, an increase from last year's 35%. Keep in mind that's the federal tax rate. Your state may also impose an estate tax, and additional taxes may be due if you own property in other states.
Improved clarity paves the way for updating estate plans. Give us a call to schedule an appointment for a tax review of your wills, trusts, beneficiary designations, and exposure to state taxes.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2013
April 29, 2013
Update your estate planning
Have you been putting off your estate planning due to uncertainty in the tax law? Then you'll be happy to hear much of the uncertainty has been eliminated by the American Taxpayer Relief Act of 2012.
Here are three rules the Act made permanent, beginning in 2013.
- The basic federal estate tax exemption is $5 million, adjusted annually for inflation. For 2013, the exemption is $5.25 million, meaning you can transfer assets up to that amount, estate tax-free, to your heirs under your estate plan or through gifts during your lifetime.
- "Portability" can increase your exemption. Portability is an election you make as an executor to apply the unused portion of one spouse's basic exemption to the second spouse's estate. The potential benefit: no estate tax on $10.5 million of assets.
- The maximum estate tax rate is 40%, an increase from last year's 35%. Keep in mind that's the federal tax rate. Your state may also impose an estate tax, and additional taxes may be due if you own property in other states.
Improved clarity paves the way for updating estate plans. Give us a call to schedule an appointment for a tax review of your wills, trusts, beneficiary designations, and exposure to state taxes.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2013
