What is the maximum amount of wealth that I can transfer without paying a wealth transfer tax?
Under current law, every individual may transfer up to $1,000,000 cumulatively during his or her lifetime free of gift tax. Subject to certain exceptions, any lifetime transfer in excess of $1,000,000 is taxable at 45%. In 2008, every individual may transfer up to $2,000,000 upon their death free of estate tax. However, if any lifetime gifts were made, subject to certain exceptions, they are deducted from the $2,000,000 credit equivalency amount. It should be noted that under legislation passed by Congress in 2001, the estate tax credit equivalency amount will increase to $3,500,000 in 2009; it will be repealed entirely in 2010, i.e., there will be no estate tax whatsoever for that year; and then it will be reinstated at $1,000,000 in 2011. Sounds crazy, doesn’t it?! Everyone’s best guess is that Congress will revise the law during 2009 and establish a credit equivalency amount that will remain constant for several or many years to come. The tax rate on generation skipping transfers is
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