Welcome news: As of 2016, if you die with less than $5.45 million in assets — or $10.9 million if you’re married — your estate won’t owe federal estate tax.
Surprised? Most people are. As a financial planner, I come across many people who list avoiding estate tax as a top priority in their financial plan. But in reality, very few people accumulate enough wealth to make federal estate tax an issue.
Small minority hit with tax
Some people might be concerned about estate tax because the federal exemption amount used to be much lower. As recently as 2008, it was $2 million. In 2001, it was $675,000.
But since the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act passed in 2010, the estate tax exemption has been $5 million and higher. The amount increases each year to adjust for inflation.
The top estate tax bracket is 40%, so this high exemption amount saves a lot of people a lot of money. In fact, according to the Tax Policy Center, only 5,300 estates were expected to be taxable in 2015. That is, out of the 2.6 million people who were expected to die last year, only 1 out of every 495 was projected to have a taxable estate.
Arthur H. Geffen
Attorney & Counselor at Law
1620 East Beltline Road
Carrollton, TX 75006
972-242-8887
972-446-7976 fax
https://www.dallasestateattorney.com
Business Organizations, Tax, Estates & Trusts, Probate
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