Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
In the United States, the estate tax is a tax imposed on the transfer of assets from a deceased individual to their heirs. It’s worth noting here that the estate tax does not generally apply to assets left to a spouse or a charitable organization, but it does apply to assets transferred to children, grandchildren, etc.
In 2009, the estate tax maxed out at 45% on taxable estates in excess of $1.5M. However, a significant amount is typically exempted from such calculations, so only a small fraction of estates are actually subject to the estate tax each year.
So what about 2010? Well… As part of President Bush’s 2001 tax cuts, the estate tax was repealed for 2010, though it will be back in 2011 with higher rates and reduced exemptions. While Democrats promised to close the 2010 gap when they took control of Congress, they failed to reach an agreement. This means that the estate of anyone who dies in 2010 will pass completely untaxed to their heirs.
I mainly bring this up because the New York Times recently highlighted the case of a Texas billionaire who passed away this past spring. Because of the timing, his $9B estate completely escaped the estate tax. Had he died three months earlier, his estate would’ve been hit by the aforementioned 45% rate, and if he had lived into 2011, the rate would’ve increased to 55%.
The Senate Finance Committee is now trying to reinstate the estate tax for 2010, but it’s unclear whether or not such changes could be made retroactive to those who have already died in 2010. What do you think? Should Congress try to close this gap before the end of the year? If so, should they try to re-capture the lost estate taxes from earlier in 2010? Or should they leave well enough alone?
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (692)
- Dish Network Customer Service SUCKS (535)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (326)
- How Much Should You Pay a Babysitter? (284)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (230)
- Will Mac OS X Lion Kill Quicken 2007? (191)