Estate Taxes Going Forward
We got some good news from all of the fiscal cliff wrangling in the area of estate taxes. A lot was at stake. In 2012, there was an estate tax exemption of $5 million+ per person, with spouses being able to combine that amount for a total of $10 million. In 2012, there was an estate tax rate of 35 percent on everything over $5 million for a single individual or $10 million for a couple. That was all set to change on January 1, with the estate tax exemption going back to $1 million and an estate tax rate of 55 percent on everything over $1 million!
Fortunately, the exemption was set at $5 million going forward and will be adjusted for inflation. The provision which allowed spouses to combine their exemption amounts, referred to as “portability”, was made permanent. Therefore, very few estates going forward will have to implement tax planning as part of their estate plan. Keep in mind, however, that these laws can change at any time as Washington, D.C. looks for extra sources of revenue.
Do you have any questions about estate taxes or estate planning in general? Call me, Sarah White, Cobb county estate planning attorney, at 678-453-6490. I’d be happy to discuss your estate planning needs with you.