'Tis the Season . . . to Review Your Estate Plan: A New Year's Resolution That's Easy to Keep
December 21, 2006
Gina M. Barry, Esquire
It’s the time of year for New Year’s resolutions. Most resolutions are so cumbersome, the maker of the resolution is unable to keep the resolution, which is self-defeating. A simple resolution to make, and keep, is to review your estate plan. Annual review of your estate plan ensures that your plan remains current as there are many issues that can make an update to your plan necessary.
The federal estate tax threshold will change many times in the coming years; however, it appears that the state estate tax threshold will hold steady. A deceased person may pass up to $1 million to his heirs without incurring any Massachusetts estate tax. This same individual may pass up to $2 million to his heirs without incurring any federal estate tax. In 2009, the federal threshold will increase to $3.5 million. In 2010 only, the federal estate tax is repealed. Note well, however, that in 2011, the federal threshold returns to $1 million.
When property is passed to a spouse, even if its value exceeds the current threshold, no estate tax will be incurred as the unlimited marital deduction allows “free” passage of assets from one spouse to the other. Be wary of the trap that awaits married couples here. When the surviving spouse passes away, the assets will be in the estate of that spouse and will be fully taxed. If you are married or single and your estate exceeds the current threshold, proper planning can minimize the estate tax.
Even if your estate is valued at less than the estate tax thresholds...
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by: Gina M. Barry
Prime
January 2007
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