The Importance Of Avoiding The Estate Inheritance Tax
An estate inheritance tax can cost your survivors as much as 45% of the inheritance for which you worked so hard to provide them, and if your estate is large enough and you do not do some careful estate planning, your heirs may end up receiving less of what you left then the government does. That certainly does not seem to be a scenario with large appeal, so you would do well to acquaint yourself both with the estate tax inheritance laws and with the legal means of seeing that your assets are exempted. For that, and especially if your estate is complicated, you really need the services of an expert estate planner and /or tax attorney. You may be able to find an attorney qualified in both sp4ecialites.
If you are in the US, the 2007 exemption is $2,000,000, and by 2009, the exemption will increase to $3.5 million. In 2010, there will be no estate inheritance tax, but with the logic known only to legislators, it will be back in 2011, at a rate do be determined. Because none of us is able to read the future, it would be best to simply save as many assets as possible from being included in our estates. That's the best strategy for staying under any future estate inheritance tax caps. The amount of your federal estate inheritance tax liability will be determined under not ojust on the amount of your estate, but according tot the rules of the Federal unified transfer tax. This tax includes, in addition to the estate taxe, a gift tax and a generation-skipping or GST tax. The real purpose of the gift and GST taxes, though no Congressperson will tell you, is to keep you from avoiding paying an estate tax. How? Because without them, rich people could keep their estates below the estate inheritance tax cap by giving their assets away during their lifetimes. So when you die, your estate inheritance tax will be based not only on the property you had at the time of your death, but on the taxable gifts you made to others during your life. So the $2 million of your estate which is exempt from taxes in 2007 will reflect your generosity. Under today's tax laws, you are allowed to give up to $24,000 a year to as many people as you like, and it will not affect your $2 million estate tax exemption. But every penny above $24,000 which you give to any individual will be added to the size of your estate, and if you get pushed over the $2 million cap, will be taxed at 45%. So your best chance to beat the estate inheritance tax is to consult with an estate planner and see what options, like living trusts, are available to you. There are ways for you to have the use of your property during your life time, while passing the residue on to your heirs without worrying about the costs of probate, and more importantly, about the estate inheritance tax. |
