It was a surprise to many following this issue when President Obama not only extended the Bush-era tax cuts, but also increased the federal estate tax exemption to $5 million for individuals and $10 million for couples.
According to a recent Mercury article, entitled, How Restoration of the Federal Estate Tax will Affect You,
some interesting implication are assessed:
The article further goes on to elaborate:"The new law restores the federal estate tax for the next two years at a 35 percent tax rate, with estates up to $5 million ($10 million for couples) exempt from the tax. Furthermore, the new estate tax is retroactive to Jan. 1, 2010."
“This means that heirs of persons dying in 2010 can choose either to follow the 2010 rules (no federal estate tax at all, but with a limited step-up in the cost basis of inherited assets), or to follow the new law with a $5 million exemption and a step-up in cost basis.”
There has been some concern among attorneys as to whether the public will understand the need to properly plan a will or trust in light of these large exemptions. On the contrary, the new tax laws that are in-flux should, if anything, prompt families to seek an updated assessment of their existing will or trust documents.
Image: renjith krishnan / FreeDigitalPhotos.net Evan H. Farr on Google +