What is the Estate Tax?
The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of… • Frequently Asked Questions About Wills, Living Wills and Powers of Attorney WHAT DOES A WILL DO? The simplest way to ensure that your funds, property and personal effects will be distributed after your death according to your wishes is to prepare a will. A will is a legal document… • Fair Market Value of an Estate Fair Market Value is defined as: “The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or… • Retirement Planning May Drive the Decision to Buy Annuities, But Estate Planning and Inheritances Drive Many to Sell FOR IMMEDIATE RELEASEJ.G.
The estate tax is a tax on your failure to spend your last nickel at the same time as you exhale your last breath. The tax is imposed on the value of everything you own when you die (including life insurance proceeds and retirement plan death benefits, along with your house and everything else you would expect to be taxed). If you are a U.S. resident, the law gives you an exclusion from the Federal estate tax that enables you to shelter a certain amount of assets from the tax. For many years, this exclusion translated into a $600,000 shelter. As of 2005, the shelter is $1,500,000, and, under current law, it graduates upward over the next several years until it tops out at $3,500,000 in 2009. This shelter, called the applicable exclusion amount (formerly known as the unified credit, if you are familiar with that terminology) will increase as follows: 2005 $1,500,000 2006 to 2008 $2,000,000 2009 $3,500,000 As of 2005, if the value of your estate is more than the applicable exclusion amou
The federal estate tax is a tax on the transfer of large amounts of money. When someone dies, his or her assets (the person’s estate) are distributed to heirs. If the total value of the estate is large enough, an estate tax is imposed before the assets are distributed. In 2003, the net value of an individual’s estate must exceed the basic exemption of $1 million, with a $2 million exemption for couples. As part of President Bush’s 2001 tax cut, this exemption will gradually rise to $3.5 million for an individual ($7 million for couples) by 2009. Currently, with planning, small business owners can pass on $5 million tax-free. For farms, that figure is $8 million. The estate tax and charitable giving By excluding an unlimited amount for charitable giving, the estate tax offers a valuable incentive to donate to charity. One-third of private foundation revenues come from estate tax giving. Minnesota benefits greatly from private foundation grants made possible by the incentive of the estat
All property ( and certain powers) that a person has at the time of his/her death is subject to tax. You’ve heard the saying that, “the only thing certain in life is death and taxes,” – well, it’s not certain but if it wasn’t taken away from you by tax during your life it can be taxed at your death and taken from your estate. The estate tax is payable by your estate – it is usually paid by the estate of the decedent before property is distributed to the beneficiaries of the estate. Barring an extension, the estate tax is due within nine (9) months after your death. Everyone’s estate is subject to the estate tax; however, there is: (1) an unlimited estate tax marital deduction when property is passed to a surviving United States citizen spouse of the decedent (so long as certain prerequisites are met), (2) a unified credit which enables every individual to dispose of up to a certain indexed dollar amount of property by gift during lifetime and distribution after death, (3) an exclusion
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