ESTATE TAXES
It is always kind of difficult to part with your hard earned money and hand it over to the taxman. In spite of this, the vast majority of people can accept the fact that paying taxes is simply a part of life and that the revenue that is generated is necessary.
However, people are generally going to take exception to being asked to pay taxes that others are not required to pay. There are also many who feel less than good about being taxed twice on the same income. These factors are part of what makes the estate tax hard to justify in the minds of some.
You only have to pay the estate tax on the portion of your estate that exceeds the exclusion amount that exists at the time of your death. This amount changes all the time, and this in itself is seen as unfair to a lot of people. Right now the estate tax exclusion is $5 million, but it is going down to $1 million when 2013 arrives.
So if you die in 2012 with $5 million your family is not exposed to the estate tax. But if you die on New Year's Day in 2013 with the same $5 million your heirs would be facing a $2.2 million tax bill.
In addition to the fact that it is selectively imposed, the estate tax is an instance of double taxation. You've already paid income tax on your earnings and your estate is comprised of resources that you accumulated with your after-tax earnings.
There are however things that can be done to mitigate your estate tax exposure. If you are interested in looking into them, the intelligent first step would be to sit down and discuss estate tax efficiency strategies with an experienced Redlands estate planning attorney.