What estate tax changes will 2013 bring?
Virtually all of my clients tell me that they absolutely do not want the government to end up with any of the assets they’ve worked so hard to accumulate during their lifetimes. During 2011 and this year, I have been pleased to inform them that there’s currently an estate tax exemption in place of $5 million, which spouses can combine for a total of $10 million, without doing any special planning as required in previous years. This has made my clients very happy.
However, right now the future of the estate tax for 2013 is very uncertain. Currently, for 2013 the exemption is only scheduled to be $1 million per individual. In addition, couples can’t easily combine their exemptions as they could during 2011 and 2012. What’s even worse is that the estate tax rate is scheduled to increase from 35 percent to 55 percent. Another problem for estates in 2013 – a new tax to fund Obamacare will go into effect, which is set to be 3.8 percent on certain trust and estates income.
Although many people think the estate tax is only for wealthy individuals, the taxable estate includes life insurance policies, 401(k)’s, IRAs, real estate, and more. With a couple of good life insurance policies in place or some real estate that’s appreciated over time, many people who consider themselves to be middle class could be facing an estate tax issue if they were to die in 2013 without a change in the estate tax laws. Whether the law will change is up in the air. In an election year, anything could happen.
If you have any questions about estate taxes or basic Georgia estate planning, call Sarah White, Marietta estate planning attorney, at 678-453-6490.