What is an Estate Exemption?
The estate exemption rule means that residents of the United States have the right to transfer up to a specific amount to their heirs — those individuals designated in the individual’s will who will receive the assets — without the gift being subject to an estate tax levied by the Internal Revenue Service. This rule is especially relevant for people who have accumulated a significant estate during their lifetime. The amount that can be transferred on a tax-exempt basis is set by the U.S. federal government. From 2006-2008, a person could leave up to $2 million US Dollars (USD) in bequests to another individual on a tax-free basis. The estate exemption limit goes up to $3.5 million USD for 2009, and there is a plan being discussed to eliminate federal estate taxes entirely after that point. Until estate taxes are eliminated, there are some strategies that married couples who have accumulated a significant amount of assets can use to ensure that more of them reach the people they desig
