LegalX Blog is dedicated to bringing you the latest interesting news in law and providing you with legal resources that can help you make informed decisions.
Posts Tagged ‘federal’
Farmers Exemption from Estate Taxes
Wednesday, August 19th, 2009
U.S. House of Representatives (H.R. 3524) recently introduced a bill that will exempt family farms from federal estate taxes if the farms will stay with their respective families. The bill is called Family Farm Preservation Conservation Estate Tax Act. It was assigned to the Committee of House Ways and Means after being introduced by (D-Colo) Rep. John Salazar and (D-Napa) Rep. Mike Thompson.
According to Laurel Brown, the spokeswoman of Thompson, “The bill would defer estate taxes on conserved and agricultural land indefinitely, so long as it still remains in the family - this ensures that nobody would have to sell the land just to pay for the estate taxes. Then Murray said that “So many family farms have been struggling until now. This bill will encourage farms to remain in the family’s possession. There aren’t too many left.”
The law governing agricultural estate taxes is expiring next year. It’s expected to be replaced by another law in 2011 that would tax families blending the levels of 2001 and 2002. This level is hard for a lot of family farms, which are typically asset rich yet cash poor.
The new estate legislation was endorsed by 28 farm organizations including Western United Dairymen, Western Growers, California Association Winegrape Growers, and California Farm Bureau Federation.
Tags: agriculture, bill, estate, estate taxes, farms, federal, John Salazar, Laurel Brown, law, legislation, Mike Thompson, U.S. House of Representatives
Posted in Estate Planning | No Comments »
Future of Estate Taxes
Saturday, August 15th, 2009
Legislative gurus, estate attorneys, and financial planners are bustling about the estate tax’s future. A lot of people already know that under the 2001 EGTRRA (Economic Growth and Tax Relief Reconciliation Act), federal estate tax changed almost annually for the past few years. In fact, it’s most likely to phase out entirely next year but will come back in 2011 if things don’t change in Washington.
Currently, estate tax exclusion rests at $3.5 million (for married couples, $7 million) and top tax rate is at 45%. When federal estate tax goes back in 2011, the exclusion would drop back - $1 million for individuals and $2 million for married couples, with top tax rate rising to 55%.
Today, most experts would agree that estate taxes are here to stay considering that budgetary challenges occupy congress and the current administration. Also, economic crisis is still underway. Legislation has been introduced to keep exclusion at current levels and marry this exclusion to lifetime gift tax exemption.
At this point, it’s still too early to tell the ultimate fate of the current proposal and all others that are bound to be proposed during the coming months. In the meantime, those in the know solidly believe that it’s important to revisit your current estate plan as well as undertake proactive tax planning.
Tags: attorneys, EGTRRA, estate attorneys, estate plan, estate tax, federal, financial planners, legislation, legislative gurus, proposal, tax planning, Washington
Posted in Estate Planning | No Comments »
Never Ignore Estate Tax Planning
Monday, August 10th, 2009
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
Posted in Estate Planning | No Comments »