As the year progresses toward December 31st one of the biggest estate planning opportunities in modern history is getting set to expire. The Bush era tax cuts, as modified in December 2010, created an unprecedented FIVE MILLION DOLLAR GIFT TAX EXEMPTION. This exemption, now $5,120,000, is set to expire at year end.
The estate tax can quickly eat 50% of your assets of death… even if you have a living trust. Yes, a living trust does not, in and of itself, avoid estate tax! You need to do more if you have a potentially taxable estate. As of today you would need to have more than $5,120,000 to be estate taxable but that number is set to shift to $1,000,000 on January 1, 2013. Yes, just one million and that includes life insurance and retirement accounts!
If your total estate may be worth more than $1,000,000 on January 1, 2013 then you need to look at your estate plan NOW! THIS YEAR. Do not wait!