One of the top priorities that estate planning attorneys have is to provide solutions that enable estate tax efficiency when it is necessary. If you have not looked into the subject you will probably be surprised to hear how massive the asset erosion can be if you do not take any action to mitigate your exposure.
As of this writing the maximum rate of the federal estate tax is 35%. This is clearly attention-getting in itself, but the rate is scheduled to rise all the way up to 55% in 2013. Yes, we are talking about a federal death levy that will consume the majority of the taxable resources that you leave behind.
There is an estate tax exclusion that allows for a certain amount of money to be passed on before this tax kicks in. Right now the exclusion is $5.12 million, but this is scheduled to change along with the rate in 2013.
At that time the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 will sunset, and when it does the estate tax exclusion will be sliced all the way down to just $1 million.
So when this year comes to a close everything that you leave behind above $1 million is subject to a 55% estate tax if you take no action to gain estate tax efficiency.
It should be noted that changes to current laws are always possible but these are the scheduled parameters as they stand today.
The best way to proceed with regard to the changing landscape is to have a professional evaluate your unique situation. If wealth preservation is important to you take action right now to arrange for a consultation with a licensed and experienced Willoughby OH estate planning lawyer.