IS ESTATE TAX ONLY A CONCERN FOR THE RICH?
Oct. 25, 2013
Developing a good relationship with a licensed, experienced Redlands estate planning lawyer is very important so that you can be certain that the information that you are working with is correct and current.
With this in mind, tax laws that could have a significant impact on future generations of your family are always changing. So, if you just believe anything that you hear or read you may be buying into outdated notions.
There are also some widely held myths out there that your attorney will guide you away from. One of these is the idea that only rich people need to concern themselves with the possibility of estate tax exposure.
At the end of this year the estate tax exclusion is going to be reduced to $1 million, and the rate is going up to 55%. (The current estate tax rate is 35%.) This means that the portion of your estate that exceeds $1 million in value would be subject to a 55% federal tax.
According to CNN Money, there are in excess of 10 million households in the United States who are in possession of resources exceeding $1 million in total value. They expect this figure to double over the next eight years. So, there are a whole lot of Americans who are in taxable territory, and many of them would say that they are not by any means rich.
Communication with your attorney is key because false assumptions can prove costly. The estate tax is something that everyone should be aware of on an ongoing basis as laws change and your financial situation improves over time.