If you are a millionaire and were planning to die on December 31, 2011, you may want to wait till January 1, 2012, so your heirs can get an extra $120,000 in estate tax exemptions, reports Forbes. Yes, these days there is strategy even in dying.
According to Forbes there are some real benefits:
The estate tax exemption will be indexed for the first time, so that for 2012, up to $5.120 million of an estate will be exempt from the current 35% federal estate tax. That's up from $5 million in 2011; that means an individual could leave $120,000 more estate-tax-free if he dies on Jan. 1, 2012, not Dec. 31, 2011.
Indexing of tax bills means moving more income into lower brackets. This allows a high-earning person to pay less tax.
All in all 2012 estate tax planning has better news than 2011 (which in its own way was not a bad year).
While at first blush planning for your death might seem like an unpleasant idea, truth is that everyone should be doing it. Apart from preventing the state of New York from controlling a person's property, advanced preparation with an experienced estate planning attorney can: allow you to leave funds to your favorite charities; name a trustworthy and responsible executor to administer your estate, as well as name trustees for any trusts you may create (including your favorite pet); and, finally, help people avoid taxes so more can be left to them.
As seen above, 2012 will be a better year in terms of estate taxes. For more information on all such topics please see an experienced attorney from the list below.
Related Resources:
- Find a New York Estate Planning attorney (FindLaw)
- Choosing Between Revocable and Irrevocable Trusts (FindLaw's KnowledgeBase)
- Estate Tax Changes for 2011 (FindLaw's KnowledgeBase)
- New Estate Tax Rules for 2011 and 2012 (Center on Budget and Policy Priorities)
ShareThis
