Estate Taxes – The Current Status of the Law
Currently
As of today, December 17, 2010, both the Senate and the House have passed the Middle Class Tax Relief Act of 2010. It has been sent to the President for signature and, according the news report I just heard, the President intends to sign it into law within just a few hours.
Because the law has just passed, I have not had the opportunity to study the full law in detail.
How does this new law affect you?
If you (and your spouse, if you are married) are worth less than $5,000,000, there will be NO ESTATE TAX upon your death. However, no estate tax does not mean that you should not plan your estate. For more information on this subject, please see my article Why You Need Estate Planning (and taxes re only one small reason).
If you (and your spouse, if you are married) are worth more than $5,000,000, the law taxes the assets you own at the time of death which are in excess of $5,000,000. The highest tax rate is 35%. There are methods to reduce and perhaps eliminate estate taxes which may apply to you and your situation. For more information, please go to Methods to Reduce Estate Taxes.
What Should You Do?
We encourage you to meet with us as soon as possible to review your estate plan and make any changes that are necessary for this law. We need now to ensure that your property is positioned to receive the maximum step-up in basis increase available under current law. This is a time that demands a new approach to your planning with new thinking and building in flexibility to see that your wishes are fulfilled no matter what Congress will throw at us this year or next. We have solutions that will meet you planning objectives with the least amount of tax impact.