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    Home » Estate Planning » Estate Planning Myth Debunked

    Estate Planning Myth Debunked

    February 29, 2012Estate Planning

    You will sometimes hear people say that they are not worried about the estate tax because you have to be “rich” to be exposed. In truth, this would depend on your definition of the word rich and in fact many people who do not consider themselves to be wealthy should indeed be concerned about the estate tax.

    The estate tax exclusion amount is not something that is set in stone. It has changed a number of times over the last decade and it is scheduled to change yet again at the end of 2012.

    This revision is going to raise the estate tax rate from 35% to 55% and reduce the exclusion from $5.12 million all the way down to $1 million. As a result, the portion of your estate that exceeds $1 million in total value will be subject to a 55% federal levy when 2013 arrives.

    We were faced with a similar situation in 2010 as the Bush tax cuts were scheduled to expire. Had they been allowed to sunset with no new legislation passing the exclusion would have been $1 million and the rate would have been 55% at the beginning of 2011. But a tax relief measure was signed into law in the middle of December that gave us the parameters that we have right now.

    The bottom line is that you do not have to be Warren Buffett or Bill Gates to be exposed to the estate tax. The upside is that there are legal steps that can be taken to reduce the taxable value of your estate. If you would like to explore them simply take a moment to pick up the phone to arrange for a consultation with a good Central New Jersey estate planning lawyer.

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    Alan Augulis, Estate Planning Attorney
    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.
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    About Alan Augulis, Estate Planning Attorney

    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

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