Tuesday, December 07, 2010 Federal Estate Tax Breaking News
Under the bipartisan compromise between the White House and republicans, the federal estate tax will return in 2011 and 2012.
The exemption amount will be $5 million per person, or $10 million for a married couple. That means that as an individual, you must have over $5 million of assets to ever be hit by this tax. Once you are over that exemption amount, the amount over the limit is taxed at a 35% rate.
So far, this is only a deal in theory, and has not been passed by either house, nor signed by the President.
Assuming this compromise becomes law...
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The good news: The vast majority of people aren't going to be hit by this tax.
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The bad news: Congress has punted on creating a coherent, long term tax structure yet again. By only extending the tax cuts for two years, they have promised more uncertainty in the near future. As a client of our firm, we will keep you updated on any tax changes that could effect your plan.
Your estate planning documents should be updated to reflect the new federal estate tax once the legislation is passed into law. If your estate planning documents are more than a few years old, and you had a A-B or credit shelter trust in place, these should be reviewed because they likely will not work as you intended. Please call our office today at (215) 706-0200 for your complementary review. |