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Estate
taxes
are transfer taxes imposed by the federal government on the
transfer of property from your estate to those who inherit
from you. Also, many states charge an additional death tax
of some amount, either to the estate or to the beneficiaries.
This discussion will only consider the federal taxes.
To
determine whether estate taxes are payable, you must know
the size of your estate. Your estate includes, as a general
rule, everything you own, including any life insurance you
own. If the size of your estate is smaller than the Unified
Credit, no taxes are due. If, however, the size of your estate
is larger than the Unified Credit, taxes are paid on the amount
of your estate exceeding the Unified Credit.
The
size of the Unified Credit changes from time to time, as does
the tax rate. This chart will help you estimate your estate
taxes.
| Calendar
Year |
Unified
Credit Amount |
Highest
Rate of Estate and Gift Tax |
| 2002 |
$1
million |
50% |
| 2003 |
$1
million |
49% |
| 2004 |
$1.5
million |
48% |
| 2005 |
$1.5
million |
47% |
| 2006 |
$2
million |
46% |
| 2007 |
$2
million |
45% |
| 2008 |
$2
million |
45% |
| 2009 |
$3.5
million |
45% |
| 2010 |
Estate
Tax Repealed |
Top
individual rate for gift tax only |
| 2011 |
$1
million |
55% |
Even
thought this reflects the law as it exists now, there are
many people who do not feel Congress will allow this law to
remain in effect without some serious changes. You should
always consult your estate planning attorney and accountant
before making any changes to your Proper Estate Plan to see
how the tax laws will affect you and your loved ones. |
