How To Reduce Your Estate Taxes

If your estate is valued above a certain amount, your heirs will be faced with the possibility of paying the federal estate tax.

At the present time the estate tax exclusion is $5,120,000 and the rate of the tax is 35%. So the part of your estate that goes beyond the exemption amount undergoes the 35% tax. This arrangement is just in place through the end of this year nevertheless.

The estate tax exemption is decreasing to just $1 million and the rate is rising to 55% when the tax relief bill that was signed into law in December of 2010 expires at the start of 2013. The estate tax is merged with the present tax so this present $5.12 million exemption consists of both your estate and any gifts that you give throughout your life.

So, due to the fact that the unified exemption is being reduced at the end of the year it might be a smart idea to think about giving gifts in 2012. In addition to this, there is a $13,000 per person yearly gift tax exemption that does not affect the life time unified exemption. So you can give as much as $13,000 each year to any variety of gift recipients devoid of the gift tax.

To develop a smart strategy that lowers the taxable value of your estate you’re going to want to sit down and discuss your unique situation with a great Sarasota Estate Planning legal representative.

This is especially important right around now with changes to the estate tax criteria looming just over the horizon, says Steve Bliss, a probate attorney in Temecula

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