There has been much debate in the estate planning community as to what President-Elect Obama planned to do with the Federal Estate Tax, otherwise known as the death tax. As a Michigan estate planning lawyer, I help our clients plan for the Federal Estate Tax.
The current tax exempts estates smaller than $3.5 million. In 2010, there is an unlimited exemption. However, as it currently stands, come 2011, anything over $1 million that is passed to non-spouses will be taxed at 55%.
According to a recent Wall Street Journal article, President-Elect Obama plans to lock in the current $3.5 million exemption and tax anything over that amount at 45%. For example, if you have an estate (including business interests, house, life insurance, etc) totaling $4.5 million, you will be paying $450,000 in taxes under his plan if you do not do any estate planning to minimize the tax hit.
The current tax exempts estates smaller than $3.5 million. In 2010, there is an unlimited exemption. However, as it currently stands, come 2011, anything over $1 million that is passed to non-spouses will be taxed at 55%.
According to a recent Wall Street Journal article, President-Elect Obama plans to lock in the current $3.5 million exemption and tax anything over that amount at 45%. For example, if you have an estate (including business interests, house, life insurance, etc) totaling $4.5 million, you will be paying $450,000 in taxes under his plan if you do not do any estate planning to minimize the tax hit.
While $3.5 million sounds like a hefty exemption that many will not exceed, it can be very costly for small business owners and family
farms. You can read more of the WSJ article, including further analysis here.
Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer
Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer
