Article Contributed on: 7/12/2006 2:23:47 PM
Despite the political rhetoric and manuverings in the Federal House and Senate, congressional legislative action to repeal the "Death Tax", otherwise known to most of us as the Federal Estate Tax, is not to be expected soon.
On June 8, 2006, the United States Senate took up a proposal to make the repeal of the Federal Estate Tax permanent. Such legislation had been enacted by the Congress in the first term of the present Bush Administration.
In the earlier legislation they repealed the Estate Tax, but for one (1) year only. That's right, you heard me correctly. The tax will be completely repealed for the year 2010. Anyone dying in that year will have no estate tax at all. Warren Buffet, Bill Gates and the Walmart heirs can all die in that year with no tax consequences whatsoever. Also, people with lesser means have the same benefit and no tax will be imposed upon anyone dying in that year.
However, in year 2011, the tax is reinstated at rates and exemption levels closer to what we had before the initial legistation. Such a deal!
In 2011 those dying in that year will face an estate tax of 50% of the monies above $1,000,000.00 ($1Million). An estate of $1,100,000.00 will generally trigger a tax of $50,000.00 (deductible expenses not considered for this example.)
The action to make the tax cut permanent failed by 3 votes for cloture. Some considered a compromise to raise the lifetime exemption amounts and reduce the tax rates. But this too failed to gain sufficient support to avoid filibuster. So....don't expect any significant changes to the tax. There simply is not enough political will-power or determination to "make it happen". If the political climate changes then some change may happen. I have been waiting since 2000 for such action and have yet to see it come to pass.
So, planning as if the law in 2011 will be in effect, married couples, using suitable trusts arrangements,can protect upwards of $2,000,000.00 from taxation on the death of the last surviving spouse. These are commonly used revocable living trust agreements that create a split in the total estate upon the death of the first spouse. Such planning significantly reduces or eliminates federal estate tax in those situations.
These methods are relatively cheap and easy to accomplish for estates that are, or may become, subject to the tax.This presents a wonderful investment that will save many times over the legal costs of creation. Would you spend a few thousand dollars to save several hundred thousand dollars? Of course you would, it just makes sense!
As a beginning rate, I chargea flat fee of $3,500.00 for a married couple's and $2,800 for individuals(expenses extra). As part of the flat fee, I also include two (2) years free legal services to change, modify or amend any of the trust documents, wills, powers of attorney, medical directives or to deal with property held by the trust.
The fee includes all asset transfers into the trusts and all communications with account representatives as my be needed.
For more information please see my website at:
http://www.MyNewWill.com
or
http://www.jeroldgilbert.com
Please call me to discuss your situation or to set up an appointment.
My office is conveniently located close to I-225 and Parker Rd. near the Market Place Office complex. Home visits are available. The initial consultation is free.
Jerold R. Gilbert, Esq.
Jerold R. Gilbert Law Offices, P.C.
3090 S. Jamaica Ct., Suite 105
Aurora, CO 80014
720-748-6600
720-748-6601 fax
jgilbert@jeroldgilbert.com