Never Ignore Estate Tax Planning
Monday, August 10th, 2009 at 9:54 pm
At this point, a high percentage of Americans don’t need to worry about federal death tax. Federal government allows tax-free exemption up to $3.5 million net worth for individuals and $7 million combined for married couples if they do some basic planning. When they don’t have a basic estate plan, they could miss this full exemption and actually pay a seven-figure tax bill.
Currently, the federal law is hoping that in 2010, all states would pass this estate-tax-free. However, off-the-record word from Congress says that there’s no way this law will survive 2009. The states are re-evaluating their existing death tax rule. There are some states that have no death tax, such as Florida. While others, like Massachusetts or Connecticut have death taxes as high as 10% for a one million estate.
Therefore, it’s foolish to ignore the issue of estate tax. Imagine people evading the local sales tax in their state, purchasing in another state, moaning about their annual income tax, yet doing nothing to plan for the largest tax they’ll ever pay? It sounds ridiculous but it’s so common.
Ben Franklin may be right when he said “There are only two guarantees we have in life - death and taxes.” And when death comes, taxes are voluntary. Therefore, plan your estate wisely.
Tags: Americans, Ben Franklin, death, death tax, estate plan, Estate Planning, estate tax, federal, law, tax