Why Everyone should Plan for Estate Taxes
Federal and State estate taxes are constantly changing. In the last ten years the Federal Estate and Transfer tax exemption amounts have gone through three tax act changes, and the current tax act is scheduled to end in December, 2025. Since 1997 the Federal Estate and Transfer tax exemption amount has increased over nineteen times. Of course, Congress and the California Legislature and always seeking new revenue, often through some sort of taxation. The estate tax exemption (reduced by certain lifetime gifts) also increased to $11,700,000 in 2021, and the tax rate on the excess value of an estate also remains at 40%. What will happen in 2025?
A good estate plan takes considers your current financial situation, a great estate plan considers future tax law changes. Your estate plan should cover in case of an increase in Federal Estate Taxes. Tax planning allows your beneficiaries to pay only their fair share of taxes from your estate. A properly funded living trust avoids the time, expense and publicity of Probate Court. Make sure you have a great estate plan that keeps any current or future taxes to a minimum. Call The Law Office of Ronald T. Cole today.