ALERT, ALERT ….There is a law change which will occur on January 1, 2013.
Next year, estate tax will affect all estates over one million dollars. Estate taxes will go back to past rates of up to 55%. This year, an estate would have to be in excess of $5,120,000 to incur any estate tax.
I love to teach with examples. Let’s say you are a single person and you die with a $2,000,000 estate this year. In 2012 there wouldn’t be any taxes. However, if you die next year, in 2013, and your estate is two million dollars, the tax table calculation for Federal and North Carolina estate tax is $435,000.
Please note, married couples are not typically taxed on the first death. However, if your estate is over one million dollars, planning will be necessary. If you are married and you’ve done a trust with me, it will protect two million dollars from estate taxes in 2013. It you didn’t use us to do your estate plan, it may not protect you. For a trust to work, most of your assets must be titled in your trust name. I know my assets are funded because my bank statements, etc., have my trust name on them. If you don’t have an estate plan,or it hasn’t been reviewed recently,it is imperative that you are diligent or huge opportunities may be lost.
For the rest of 2012, we have a window to protect estates up to $5,120,000 from future estate taxes. Using certain strategies, we gift a portion of your estate to other family members, without incurring gift or estate tax. However, these techniques are only good if they occur in 2012. Once the date changes to 2013, this once -in -a -lifetime option is off the table.
If your estate is over one million dollars, please take the time to come in for a free meeting with our estate tax attorney, Rebecca Long, to see what if anything can be done to make sure that your family is protected from unnecessary estate taxes and court involvement.