The Complete Guide to Planning Your Estate In GEORGIA by Linda C. Ashar

Author:Linda C. Ashar
Language: eng
Format: epub
Publisher: Atlantic Publishing
Published: 2013-03-11T00:00:00+00:00

Chapter 8

Taxes: Estate Tax and Other Taxes

One of the largest, most complex areas of estate planning is the tax involved with it. Estate tax is an important part of planning your estate because it will take a large chunk of money from what you leave to your heirs. There are several types of taxes that could affect your estate, depending on your circumstances. These include:

• Federal estate tax

• State estate tax

• Inheritance tax

• Gift tax

As part of the planning for your estate, you need to take into consideration each of these types and make changes or allotments to your estate to accommodate them if they apply.

Anyone who is living in the United States or is a U.S. citizen is required to pay federal estate taxes. All your property in the United States is taxable. Yet there are some strange laws in place to determine how much you need to pay, if you need to pay. In the last several years, Congress has passed new laws that define this information. As of publication, here is what you need to know:

• For a death that occurred in 2007 or 2008, a personal exemption of $2 million applied at the highest death estate tax rate of 45 percent.

• In 2009, the amount of personal exemption rises to $3.5 million at 45 percent.

• At the time of publication, President Barack Obama and Congress repealed the estate tax, effective as of January 1, 2010.

• In 2011, it comes back with an amount of personal exemption at $1 million, unless the repeal is changed by Congress before this time. The estate tax rate is 55 percent in 2011.

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