The thing about planning your estate that is important to remember is the fact that it is an ongoing process because things do not stand still. Some of the changes that take place that result in the need to alter your estate plan are specific to your own life. You may have a significant change in your financial standing and/or the nature of your assets, and this can impact the strategy that is ideal for you. In addition, personal matters within the family can be a factor, such as a change in marital status or when there are additions to or subtractions from the family.
But there are other dynamic circumstances to take into consideration as well, and one of these is the way that the estate tax parameters are constantly in flux. The exact amount of the estate tax exclusion is a crucial piece of information to work with when you’re planning your estate, but when you look at the last several years you find that the playing field is constantly changing.
Right now the estate tax exclusion is $5 million, meaning that only the portion of your estate that exceeds this amount is taxable. However, if no changes to the laws take place in the meantime, the estate tax exclusion will be just $1 million in 2013. In 2010 the estate tax was repealed; in 2009 the estate tax exclusion was $3.5 million. Going back another year, in 2008 the estate tax exclusion was $2 million.
So if you had an estate worth $5 million, going back to 2008 whether or not your heirs would have to pay the estate tax should you pass away and just how much they would pay varies widely. The ideal estate plan would differ as well depending on which year the assets are being transferred. This is one of the reasons why it is very important to have a relationship with an estate planning attorney firmly established so that you can revisit your estate plan regularly in an effort to stay up-to-date as these constant changes come down the pike.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
- How Can I Incorporate Charitable Gifting into My Estate Plan? - June 6, 2023
- LGBTQIA+ Pride Month in Indiana - June 1, 2023
- Debunking Estate Planning Myths - May 30, 2023
