Estate Planning is Essential As The Estate Tax Comes Back in 2011
The time that many wealthy individuals have been dreading is almost here: the estate tax is coming back. Due to the unique laws and specifications of the new estate tax, only a fraction of a percentage of those who pass away in 2011 will be subjected to it. Back in 1977, approximately 10.5% of people had to pay the estate tax. According to estimates, less than half of one percent of those who die in 2011 will do so. When combined with savvy accounting practices, many people will escape from the tax altogether and will be able to pass their sizable fortunes on to their heirs.
When the estate tax expired in 2009, many people assumed that it would be reinstated quickly; it wasn't. Instead, it was out of effect throughout 2010, which made many rich people very happy. It was assumed that when it came back, it would do so with a vengeance. Instead, the 2011 estate tax is a lot gentler than the 2009 one. In 2009, there was a $3.5 million exemption and a tax rate of 45%; in 2011, the exemption rises to $5 million and the rate drops to 35%.
The new estate tax is the result of intense back-and-forth sessions between Republicans, Democrats and President Obama. It was included on the recently passed tax bill that also extends unemployment benefits in the United States. It's important to keep in mind, however, that the new estate tax isn't going to be around forever; it is due to expire in two years. At that time, there is no telling what will happen. There could be another moratorium on the estate tax, or it could be increased to become less favorable to the country's wealthiest people. For now, however, people can begin planning for the tax that goes into effect in 2011.
Importance of Proper Estate Planning
Proper Estate Planning can help you control your assets and help you minimize taxes. It is wise to work with a trusted advisor and Estate Planning Lawyer to assist you in proper Estate allocations.
Click on the following link to read more from the New York Times: Estate Tax Will Return Next Year, but Few Will Pay It
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.