By November 15, 2011, an important estate planning decision must be reached: either opt to have the imposed federal estate tax rate reached last year by President Obama and Congressional Republicans, or opt out. If you opt-in, then assets on your estate are subject to a 35% tax rate after the first 5 million dollars; if you opt-out, your subject to the unknown. Before the agreement was made, the terms stated an exemption on the first 1 million dollars, after which assets were subject to a 55% tax rate. But according to the New York Times article, here, it’s not quite as simple as that.
If your properties are worth millions, it might be worth your time to look at the current federal estate tax in political and historical context, in addition to the usual estate planning. Allocations to heirs, beneficiaries, and other functions of estate planning are impacted by this decision. And while it seems beneficial to wealthy families by the numbers, the process will be extremely cumbersome. Estate planning is a complex state of personal affairs, and the 2011-2012 federal agreement makes it even more challenging. There are, however, people who will enjoy the perceived benefits with the assistance of an experienced estate planning attorney.