Florida Estate Planning Lawyer Blog
When one dies the value of their estate is subject to an Federal Estate Tax. This rate is currently 45%. In 2008 the Federal government has an exemption of the estate tax on the first 2 million dollars in value. In addition, many states have additional state taxes that are due when a resident of their state dies. Florida use to have an estate tax, but repealed it when the federal government stopped allowing you to deduct the amount of state estate tax paid from the federal estate tax due.
You should check on the estate tax in your state and consider costs and benefits of your state versus those with no estate tax. One of the reasons so many wealthy people move to Florida is the lack of income tax and estate tax.
How much are estate taxes?
Your estate will have to pay estate taxes if its net value when you die is more than the “exempt” amount set by Congress at that time. Here is the current schedule for the federal estate taxes:
Year of Death………Estate Tax “Exemption”
2008…………………………..$2 million 2009…………………………..$3.5 million 2010…………………………..N/A (repealed)
2011 and thereafter……….$1 million
In addition you may have to add your states taxes on top of the numbers above.
Although 2010 looks like 0, it really is higher, in 2010 the plan is tax on the increase in value of one’s estate. Under the current plan, most assets are able to take advantage of a free stepped up value based upon the fair market value at the time of the decedents death.