There was once a time when $1 million was an amount of money that made you truly wealthy. However, at this point in time this figure does not hold the same magical quality that it once did.
The fact is that you could easily have a net worth exceeding $1 million without considering yourself to be extraordinarily wealthy and if you do have over $1 million in financial resources you have to concern yourself with the federal estate tax.
As of this writing the unified estate/gift tax exclusion is $5.12 million. This may leave you thinking that you have nothing to worry about because your estate is worth less than this amount. However, this figure is not etched in granite. In 2013 the estate tax exclusion will be trimmed down to just $1 million under current laws, and the rate of the tax will go up to 55% from the 35% that is presently in place.
According to CNN Money, there are approximately 10.5 million households in the United States that are in possession of at least $1 million in total assets. And, this figure is expected to double over the next eight years. So we are talking about millions of people being exposed to the federal death tax.
You may hear it said that the estate tax is only imposed on the wealthy, but there is a far cry between someone with $2 million or $3 million in total assets and an individual like Bill Gates or Warren Buffett. The suggestion here is to avoid potentially costly misconceptions and obtain your information from a licensed, experienced Somerset County NJ estate planning lawyer.