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Will Estate Taxes Affect You?
Most families will not need to worry about estate taxes. Only families with estates over $1 million need to explore additional planning to minimize the effect of estate taxes.

This year, the estate tax limit is above $1M and will continue to rise over the next several years. In 2010, there will be no estate tax. The estate tax limit in 2011 is uncertain, but planners are preparing for a limit around $1M.

Year
Exemption
2005
$1.5 Million
2006-2008
$2.0 Million
2009
$3.5 Million
2010
Repealed
2011
$1.0 Million?
How much are estate taxes? Assets over the exemption are taxed at nearly 50%, which emphasizes the need for seeing a professional planner.

Use our ESTATE TAX CALCULATOR to print the growth and possible taxation on your estate.

To calculate your taxable estate add your assets:

e.g.: REAL ESTATE, LIFE INSURANCE, AUTOS, RETIREMENT SAVINGS

and subtract your liabilities:

e.g.: DEBTS and CHARITABLE BEQUESTS

The total is your Taxable Estate. The amount over the exemption in the year you pass will be subject to estate taxes.
How Can One Avoid Estate Taxes?
Are you close or slightly over the limit? One of the simplest and most cost effect ways to DOUBLE your exemption if you are married is to create a Living Trust called an "A-Disclaimer" or "Bypass" Trust.

After the passing of the first spouse, the surviving spouse may split the trust into two trusts: a Survivor Trust (essentially the original trust) and Disclaimer Trust simply by receiving a tax id number for the Disclaimer Trust. Assets can then be transferred into the Disclaimer Trust until the Survivor Trust is under the estate tax exemption.

The assets transferred to the Disclaimer Trust are not to be used by the surviving spouse unless the Survivor Trust is depleted of assets and the surviving spouse needs funds for Health, Education, Maintenance or Support.

If doubling your estate tax limit is not possible for you or still leaves you over the limit, contact Four Peaks Planning, Inc. so we can educate you on further strategies, such as Irrevocable Life Insurance Trusts to help offset the tax burden on your estate and family.

If you have questions or would like to learn more, please call (480) 229-6220 or send a message by clicking the email address above.
Important: Please consult with Four Peaks Planning, Inc. before undertaking any actions. The information in this web site is provided with the understanding that the publisher is not engaged in rendering legal, tax or investment advice. While every attempt has been made to provide current and accurate information, neither the author nor the publisher can be held accountable for any errors or omissions. You agree not to hold any employee of Four Peaks Planning, Inc. liable for action you take from the information on www.fourpeaksplanning.com.