• 27
  • October
    2011

Estate tax rates have been very favorable in recent years. For 2010, estate tax rates were zero. However, it is likely that in 2013 estate tax rates and dollar amounts for exemptions will revert to the laws in place in 2002. In other words, the exemption amounts will go down, and estate tax rates will go up.

Because of this likely change, and because of the fact that estate taxes seem to change year to year, it is important to have an estate plan in place that plans for future unknowns in estate taxes. This means that plans have to be made for what is now known about future estate tax rates, and for what is not yet known about future estate tax rates.

Last year, the President signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, or TRA. One aspect of TRA is the portability of the federal estate tax exemption for married couples, if a spouse dies in 2011 or 2012. The surviving spouse can utilize any unused portion of the deceased spouse's estate tax exemption. In other words, $10 million can be passed to heirs without paying any estate tax. (If any of this is not clear, it is a good idea to consult a qualified Florida estate planning attorney.)

It is also important to remember that large gifts to heirs may be subject to a gift tax. The exemption is $13,000 for an individual, and $26,000 for a married couple.

Source: Forbes "Proactively Plan For Your Estate While Tax Laws Still Benefit Donors and Heirs" Oct. 26, 2011