There are individuals who think that they don’t need to retain the services of an estate planning attorney because they are under the impression that transferring assets is a very simple matter. It could be argued that it should be simple and straightforward, but due to the tax code your legacy can be significantly reduced as you are passing it on to your loved ones if you do not take steps to gain estate tax efficiency. This is one of the reasons why careful legacy planning is so very important.
The ravages of the estate tax can have a life-changing impact on your family members, or little to none depending on whether or not you engage in intelligent advance planning. There are many different legal instruments that can be utilized to minimize or eliminate your estate tax exposure, and the ideal combination will vary on a case-by-case basis. Individualized attention is key because every situation is different and each family is unique.
Right now the federal estate tax exclusion stands at $5 million, but it is going to be reduced to just $1 million at the end of next year. At that time the maximum rate of the tax is going to rise from the 35% that is in place right now to 55%. So if your estate is worth more than $1 million and you have no reason to believe you’ll be passing away before the end of 2012 you need to take action and implement a plan that provides you with estate tax efficiency.
Here in the state of New Jersey we also have state inheritance and estate taxes. The New Jersey estate tax exclusion is just $675,000, so this is something that Garden State residents have to keep in mind as well.
If you are currently unprepared, there is a lot at stake as you can see. Seize the day and take action right now to arrange for a consultation with an estate planning attorney to maximize the impact that your legacy can have on succeeding generations.