To be optimally prepared for the future you must inventory your assets to gain an understanding of the value of your total resources and how this value compares to the estate tax exclusion. If you are in taxable territory you are going to have to take steps in advance to gain tax efficiency in an effort to preserve your wealth.
Right now the estate tax exclusion is $5.12 million per person. So, if you are married you and your spouse could combined your respective exemptions and have a total exemption of $10.24 million.
(It should be noted that at the end of this year things are scheduled to change for the worse when the exclusion goes down to $1 million and the rate rises from 35% to 55%.)
One question that often arises with regard to the estate tax exclusion involves whether or not a surviving spouse may use the exemption of his or her deceased spouse. The answer is yes and no.
For the rest of this year the estate tax exclusion is indeed portable and you could use your late spouse’s exemption as well as your own. However, this portability comes about as part of the tax relief bill that is going to expire at the end of this year and at that time the exclusion will no longer be portable.
There are a lot of questions to answer when you are making preparations for the future and the playing field is always changing. The only logical way to proceed is with the ongoing assistance of a seasoned and savvy Somerset County NJ estate planning lawyer.