Wills and Estates Page
A "simple" will
may not be appropriate in many cases. Taxable estates in excess of $1 million
dollars of persons who pass away in 2002 and thereafter may be liable for
substantial federal taxes. By virtue of the federal Economic Growth and Tax
Reconciliation Act of 2001, the applicable exclusion amount for federal estate
tax purposes will gradually increase to $3.5 million in the year 2009. In 2010, the federal estate tax will be
eliminated for that one year only and reinstated again in 2011 with a $1
million exclusion amount. However, even
if one's federal taxable estate will be less than the amounts shown below there
may be substantial state inheritance taxes depending on the state of domicile,
the nature of the assets and who the beneficiaries are. For example, in New
Jersey some transfers to a niece or nephew are presently taxed at the rate of
15%. The laws governing taxation of estates are complex and competent advice
should be sought in planning and administering estates. The materials on this
website should not be considered as legal advice and are only for discussion
purposes with appropriate legal, financial and other advisors before taking any
action.
|
Year |
Top federal transfer rate |
Federal exemption amount |
|
2002 |
50% |
$ 1,000,000. |
|
2003 |
49% |
$ 1,000,000. |
|
2004 |
48% |
$ 1,500,000. |
|
2005 |
47% |
$ 1.500,000. |
|
2006 |
46% |
$ 2,000,000. |
|
2007 |
45% |
$ 2,000.000. |
|
2008 |
45% |
$ 2,000,000. |
The federal Internal Revenue Code
IRS Forms and Publications from your Uncle Sam
