REDUCING THE TAXES ON YOUR ESTATE
Federal estate taxes and state inheritance taxes may be deducted from your property before it is transferred to your heirs. A federal estate tax applies if the value of your property exceeds an exempt amount that varies depending on the year of your death. Following is a table of the exempt amount:
Year of Death Exempt Amount
• 2002 - 2003 $1.0 million
• 2004 - 2005 $1.5 million
• 2006 - 2008 $2.0 million
• 2009 $3.5 million
• 2010 No estate tax
2011 and after, $1 million, unless Congress extends the repeal of estate taxes. A special $1.3 million exclusion applies to estates that hold investments in family businesses and farms. Your lawyer can help you prepare an estate plan that will reduce federal and state taxes. For example, your lawyer may suggest that you make gifts before you die to reduce taxes, hold property in joint tenancy with your spouse, transfer ownership of life insurance policies to your spouse or heirs, or use a trust arrangement. Your lawyer can also help you shift the tax responsibility among heirs if you would like some of them to receive their shares without being taxed on it.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright © 2008 by Velasco Law Office. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.
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