Estate Planning without proper Asset Ownership is Disastrous
December 9th, 2009 by Steven W. Tarta, Esq.Every taxpayer has an estate tax exemption, which allows you to “shield” assets from the federal estate taxation. This federal estate tax exemption can be used to transfer assets to your beneficiaries, whether outright or in trust. Bequests to your spouse however are generally not subject to estate tax.
The federal estate tax exemption amount (before taxation commences at the 45% estate tax rate) is $3,500,000 in 2009; therefore, together you and your spouse can shield up to $7,000,000 from federal estate taxation with the proper estate planning and accompanying documentation. To take full advantage of this exemption, you need both (1) proper estate planning documentation and (2) proper asset ownership. (more…)