Estate Tax: The Ins and Outs by Lee Phillips
Estate taxes are what your family needs to pay the federal or state government after your death on the assets you have that pass on to your heirs. There is lots of confusion about the estate tax now, because the new law (passed December 2010) raised the estate tax limit (exemption equivalent) to $5 million, but the law will automatically go back into the world of unknown at the end of 2012. Clearly, many families are not worried about paying estate taxes on Dad’s estate when he dies this year. However, don’t quit planning, because we could very easily get hit hard with estate taxes after 2011, and the state estate taxes are alive and will in many states. Sadly, the high exemption equivalent amount has given middle class Americans a false sense of security. The way most estate plans (trusts and wills) are worded will create a large state estate tax bill at the time when the first spouse in a couple dies. We didn’t fear the 16% state taxes when the federal tax was 55%, so everybody’s estate planning documents were worded so that the federal estate tax would be eradicated or at least delayed until the surviving spouse in a couple died. Today, that old wording will create a large state estate tax to be paid at the time the first spouse in a couple dies. The last thing a surviving spouse needs is to be forced to pay hundreds of thousands of dollars for state estate taxes. Asset Protection speaker Lee R. Phillips tours the country teaching people about using the law and Estate Planning to their advantage.