Your estate may be more valuable than you think, especially when you factor in the value of all the personal property you have accumulated. And while that may seem like good news, it may also present several problems.
First of all, taxes could severely limit the amount your loved-ones receive. In fact, Federal estate taxes can claim as much as 40% 1 of all the assets you plan to leave behind.
Secondly, those assets may take time to liquidate – or be held in probate – denying your family access during an already difficult time.
Even with the change in estate tax law, estate taxes remain a consideration. That means if you own assets, there’s a good chance you’ll need to plan for their future disposition. You may be worth more than you think. All of these assets are included in your gross estate: Cash, Stocks, bonds and annuities, Certain life insurance proceeds, Real estate, including your family home and vacation home, Property held in a trust you control outright, Art and other collectibles, Qualified retirement plan accounts, such as 401(k)s and profit-sharing plans and Your business.
Even if your estate doesn’t qualify for Federal Estate tax liability, you may have State ‘Death’ Taxes to be concerned with, for example currently in New York State the Estate tax exemption limit amount is $1million.
Many U.S. states also impose their own estate or inheritance taxes, and some impose both. Some states “piggyback” on the federal estate tax law in regard to estates subject to tax (i.e., if the estate is exempt from federal taxation it is also exempt from state taxation). Some states’ estate taxes, however, operate independently of federal law, so it is possible for an estate to be subject to state tax while exempt from federal tax (e.g. New York State).
Learn what you need to about your estate, as your life changes (we hope for the better) make sure your planning reflects where you are and want to be. Consult your trusted advisors today.
valued in excess of $5,000,000 from 2013 will be subject to estate tax rates
varying from 20-40% (depending on amount). On January 1, 2013, the American Taxpayer Relief Act of 2012 was passed which permanently establishes an exemption of $5 million (as 2011 basis with inflation adjustment) per person with a maximum tax rate of 40% for the year 2013 and beyond.
Information provided has been prepared from sources and data we believe to be accurate, but we make no representation as to its accuracy or completeness. Data and information is provided for informational purposes only, and is not intended for solicitation or trading purposes. Please consult your tax and legal advisors regarding your individual situation.
Posted by Troy Barrow, LUTCF – Troy is an independent Agent practicing professionally for six years and is the owner of Arlington Insurance Planning Services, licensed in the States of New York and New Jersey. You may contact Troy at 646 580-5189 or firstname.lastname@example.org.