The “Fiscal Cliff” Aftermath From an Estate Planning Perspective
When Congress passed the Bill dealing with the Fiscal Cliff it also clarified certain Estate Tax issues. Congress kept the Federal Estate Tax scheme essentially unchanged, however it changed the Federal Estate Tax rate for a “taxable estate” over $5 million from 35% to 40% at the highest level.
Background on Estate Taxes:
An Estate Tax is a tax on someone’s right to transfer property at his or her death. It consists, in basic terms, of the property someone owns or controls when they pass away. There is both a Federal Estate Tax and a Massachusetts Estate Tax. Under the Federal Estate Tax system, a person’s estate gets taxed if they have a “taxable estate” over $5 million (to be adjusted for inflation).
However, under the Massachusetts Estate Tax system, a person’s estate gets taxed if they have a “taxable estate” over $1 million. For the most part, people hear about a $1 million dollar mark and think that it does not apply to them. However, what consists of a person’s “taxable estate” can be quite tricky.
Here are some examples as to what can be included in a person’s “taxable estate”:
With proper Estate Planning, the amount a person owes in Estate Taxes can be minimized. There are certain Estate Planning tools an Attorney can discuss with a client to determine what fits the client’s needs and wishes.
Take Away Points:
Peter A. Moustakis is the founder of Moustakis Law LLC
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Please note that the information contained in this blog is not an exhaustive list of the matters pertaining to the discussion. Every person has a unique situation that must be tailored with the advice of an attorney after consultation. The material published on this blog is made available by the Moustakis Law LLC for informational purposes only and should not be considered legal advice. Before you make any decision that may have legal implications, you should consult with a qualified legal professional for specific legal advice tailored to your situation. Your visiting this blog does not establish an invitation to enter into, and does not create an attorney client-relationship.