FEDERAL ESTATE TAX

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

taxes

An A/B Trust can help save on Taxes

Listed below are the Federal Estate Taxes due on net taxable estates after subtraction of the Unified Tax Credit. The taxes given below would be due on a single person's estate after the death of that person or on an estate of a married couple without an A/B Trust upon the death of the second spouse. Note that the Federal Estate Tax maximum is 45% of the value of the estate which exceeds the credit. The credit extends to $3.5 million in 2009. In 2010, the estate tax will disappear completely. But in 2011, unless Congress passes an extension, the exemption will revert back to $1 million. (IRS form 706, Pub.950) The A/B Trust will offer the maximum exemption and will be necessary to get a $2 million exemption. The Trust does not need to be changed as the exemption changes.

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