Will Your Estate be Subject to the “Death Tax”?
This year, the gift and estate tax exemptions are $5.12 million, which means you can transfer up to $5.12 million as gifts or after you pass away, tax free. At these current levels, relatively few people need to be concerned about the estate tax, also known as the “death tax.”
However, unless Congress takes action before the end of the year, the exemption will revert back to the lowest amount in a decade: $1 million. Additionally, anything over $1 million will be subject to a 55% top tax rate. Your home, bank accounts, retirement accounts, life insurance and all of your other assets are all included in your gross estate for estate tax purposes, regardless of whether the assets are held in trust, go through probate, or are jointly owned. That means many more people may be affected by the estate tax in 2013.
If you would like to discuss the estate tax and how you can minimize the taxes on your estate, please contact us. We can help you protect your assets.