You should be aware of the details surrounding the federal estate tax when you are looking toward the latter portion of your life and your eventual passing. If you assume that you are not exposed to the tax and do nothing to preserve your wealth, your family may wind up paying the price later on.
The dividing line that separates those who must pay the tax from those who do not have any estate tax liability is the estate tax exclusion. Under provisions contained within the American Taxpayer Relief Act of 2012, the amount of the estate tax exclusion in 2014 is $5.34 million.
However, there is an unlimited marital exemption. If you are married, you can pass along any amount of money to your spouse without incurring any estate tax liability.
In addition, under the new laws governing the estate tax, it is remaining portable. What this means is that your surviving spouse could utilize the exclusion that was due to you after you pass away.
Of course, he or she could also use his or her own personal exemption, so the surviving spouse would have a total exemption of $10.68 million using the figures that are in place for this year. This is assuming that the deceased spouse did not use any portion of his or her personal exclusion while he or she was still alive.
If you would like to discuss the estate tax in detail with an expert, we would be happy to assist you. You can contact us electronically to request an appointment by clicking this link: Campbell CA Estate Planning Consultation