What Happens to Estate Taxes, Gift Taxes and Generation-Skipping Transfers in 2013?
Part of savvy estate planning centers around taxation and how to use estate planning tools to your advantage to minimize taxation, such as through gifting and generation-skipping transfers. When America faced its first economic challenges after 9/11, Congress passed tax cuts. For more than a decade, Congress has scrutinized taxation. In 2010, Congress made far-reaching changes that lasted only to 2012. A Bethesda estate planning law firm can help you review your estate plan or put in place an estate plan that takes advantage of tax laws.
Currently, federal estate taxes are exempt for estates valued at $5 million or less. Estate tax applies to all assets ― financial, real estate, jointly owned assets and life insurance proceeds. Unless Congress takes action before 2013 to reinstate the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, the estate tax, gift tax and generation-skipping transfer tax laws of 2001 go back into effect. What does this mean?
- 2001 federal estate taxes applied to estates valued over $1 million and taxes for non-exempt estates were 55% (current tax rate is 35%)
- Generation-skipping transfer tax exemptions apply to estates valued at approximately $1.4 million (based on inflation index differences) and estates that are valued over this amount are subject to top tax rates of 55%
- Pickup taxes are back in effect and many states and areas, including Maryland and the District of Columbia, resume state taxing of estates
If you are concerned about legal changes in estate tax law, consult with a lawyer about estate planning services to help protect your assets.
Bauersfeld Burton Hendricks & Vanderhoof LLC has offered excellent estate planning services for decades and can meet your needs.