Eliminate the Estate Tax... Legally

摘要

In a heartbeat the tax-law-especially the estate tax law- can rip a family's wealth to shreds. Luckily, thanks to the Tax Relief Act of 2001, the estate tax has been repealed, right? Wrong. The short (and real) answer is ... only if you die in 2010. The new law is a tiger that actually changes its sstate tax stripes every year - starting in 2002 all the way until 2011. The longer you live during the years 2002-2009 the less your estate tax burden might be. This tiger's stripes change - in two ways - almost every year. First, the highest estate tax rate is gradually reduced from 55 percent to 45 percent. Second, the exemption (the amount of your assets that can be left tax-free at death) rises to $1 million in 2002 (up from $675,000 in 2001) and peaks at $3.5 million in 2009. If you die during the year 2010, the tiger has no stripes. There is no estate tax because it is fully repealed. Terrific estate tax planning. If, however, you see the sunrise on January 1, 2011, your dream of tax repeal will be over. It's back to square one, except the exemption amount will be $1 million instead of $675,000, as it was before the president signed this crazy law in January, 2001. Remember, bad laws, like this estate tax law, have a history of being changed or repealed. So, expect change.