Many of our Michigan estate planning clients are concerned about the Federal Estate Tax or "death tax". This is especially important for small business owners, as the estate tax can cause small business owners to sell their business due to the cash needs in an estate. The following is a year by year account of how the Federal Estate Tax has changed over the years.
-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer
- 1797- First Federal Estate Tax enacted to help fund naval build up.
- 1802- Federal Estate Tax is repealed.
- 1862-Federal Estate Tax reenacted to help pay for Civil War.
- 1870- Federal Estate Tax repealed.
- 1898- Federal Estate Tax reenacted to pay for Spanish-American War.
- 1902- Federal Estate Tax repealed.
- 1916- Federal Estate Tax reenacted with a 10% tax rate.
- 1941- Federal Estate Tax maximum tax rate increased to 77% to help fund World War II.
- 1976- Carryover basis rule enacted.
- 1980- Carryover basis rule repealed.
- 1981- Increased Marital Deduction and Unified Credit.
- 1993- Federal Estate Tax maximum rate increased to 55%.
- 1997- Phase-in of the $1 Million Exemption for farmers and business owners.
- Between 1981-199- 126 New estate tax laws enacted, an average of 7 per year.
- 2001- Phase out of Federal Estate Tax and Generation Skipping Tax, with modified Carryover basis rules, effective in 2010.
-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer
