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Recent tax laws serve as benefit to estate planning

NAELA National Academy of Elder Law Attorneys, Inc. MEMBER

In recent years, Congress passed several laws benefiting American taxpayers, especially those with significant assets. The American Tax Relief Act of 2012 (ATRA) provides greater exemptions for gift and estate tax rates as well as important changes involving assets such as real estate and property valuation. Going forward, these changes may benefit estate planning for many people.

The ATRA sets the maximum estate tax rate permanently at 40% for taxable estates upwards of $5,250,000. In addition, those who pass away now have a permanently exempted amount of five million for their estates instead of the prior exemption of just one million. The amount for 2013 considers inflation. Such changes may affect certain people's current estate planning.

Congress' Tax Relief Act of 2010 has a portability extension; however, it has recently been permanently extended. The extension provides a provision stating that the decedent's property can now be transferred to the surviving spouse if such property is within the estate tax exemption guidelines. Additionally, property valuation changes can be of great benefit to survivors.

Changes in tax law can be extremely confusing, and many people may not be able to understand all the details. However, failure to draw up proper estate planning documents or to review current ones can be detrimental to one's financial future. Therefore, many people prefer to obtain the advice of a knowledgeable attorney, who can interpret the law to insure a greater likelihood that they will be able to make informed decisions regarding their futures as well as the futures of their heirs.

Source: Forbes, "ATRA: an unexpected plus to your estate planning", Lewis Saret, June 13, 2013

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