The estate tax exclusion is the amount of money and property that can be transferred before the estate tax can be applied. If you are married to an American citizen, you can transfer unlimited assets to your spouse estate tax-free, but transfers to others could potentially be taxed.
We have a $5.43 million exclusion in place for the rest of 2015. This comes about due to a series of inflation adjustments that have been added annually since a $5 million benchmark was established in 2011. Initially, this $5 million inflation adjustment was approved for 2011 and 2012, but at the end of that year, the American Taxpayer Relief Act of 2012 made this arrangement permanent.
The Internal Revenue Service has recently announced the estate tax exclusion adjustment for 2016. In the past, these adjustments have been at least $90,000, but apparently, the cost of living has not gone up significantly this time around. In 2016, the exclusion will go up by $20,000 to $5.45 million.
We should also point out the fact that there is a federal gift tax that is in place to stop people from giving gifts to avoid the estate tax. The gift tax and the estate tax are unified, so when you consider the utilization of the exclusion, you have to understand the fact that it is a unified exclusion that applies to gifts that you give while you are living along with the estate that will be transferred after you pass away.
If you are exposed to the federal estate tax, there are various different steps that you can take to ease the burden. The ideal course of action will depend upon the nature of your resources, your family dynamic, and your overall objectives. When you implement the appropriate wealth preservation strategies, you can keep a maximum store of assets in the family.
Learn More About Death Taxes
You should certainly educate yourself about the potential impact of the estate tax if you have been particularly successful from a financial standpoint. We have prepared an in-depth special report that will provide you with a great deal of information about this tax.
The report is free, and you can access your copy through this website. To get your copy of the report, click this link and follow the simple instructions: Free Estate Tax Report.
Schedule a Consultation
If you would like to take things a step further, we would be glad to discuss your unique personal situation with you and help you understand your options. This is true if you are interested in tax efficiency strategies, but we can also answer your questions if you have other estate planning concerns.
To set up an appointment, send us a message through the following page and we will get back in touch with you promptly: Sacramento CA Estate Planning Attorneys.
Latest posts by Timothy P. Murphy (see all)
- Do You Have to Go through Probate with a Living Trust? - August 23, 2019
- Top 3 Reasons to Create a Living Trust - August 21, 2019
- Can’t I Just Transfer My Assets to My Adult Child to Qualify for Medi-Cal? - August 19, 2019