2009 Tax Changes that May Affect Your Estate Plan

The Estate Tax Exemption, the amount of money that you can pass to your heirs without triggering estate taxes, has increased from $2 Million to $3.5 Million.  Current law provides for a total repeal of the estate tax in 2010, and then a return to the $1 Million exemption in 2011.   We don’t know how this will change over the coming years, but the expectation is that Obama’s administration will keep the exemption at $3.5 Million levels. 

If your estate is less than $3.5 Million, you probably won’t have to worry about estate tax planning.  If it is larger though, you should meet with an estate planning attorney to figure out your options for reducing your estate tax hit, which would tax any amounts over $3.5 Million at 45%.

The gift tax exclusion has increased this year to $13,000.00.  You can now make annual gifts of up to $13,000 per recipient without incurring gift tax.

 If you haven’t had your estate plan reviewed in a few years, it may be a good time to set up an appointment with your attorney to go over your plan and discuss any changes that may be needed as tax laws change. 

Filed under: Estate Planning Basics, Estate Tax Planning, Wealthbuilding Tips by Myrna Arroyo |