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Around this time last year, a great number of news articles were discussing the expiration of the Federal estate tax.  You may even remember our letter titled “The Uncertainty of Death & Taxes”.  Just one year later, American taxpayers now have “some” certainty when it comes to their Federal and state estate taxes, at least until 2013.

 

The chart below outlines newly established exemption levels and tax rates.  As always, it is important to review your existing plan and have a conversation with your attorney and CPA to address any concerns or to update your plan.  Bottom line, a short term fix has been put in place but should not be viewed as a reason to forego estate planning.  Please contact us if we can be of assistance in clarifying the issues or referring you to attorneys who can help.

 

 

2011 Estate, Inheritance & Gift Tax Facts

 

Federal 2011

 

Federal 2012

 

Federal 2013 & Beyond

 

Tennessee

Estate Tax Exemption

 

$5,000,000

$5,000,000

(indexed for inflation)

$1,000,000

$1,000,000

Maximum Estate Tax Rate

 

 

35%

 

35%

55%

Estates over $10mm 60%

 

9.5%

Lifetime Gift Tax Exemption

 

$5,000,000

$5,000,000

(indexed for inflation)

$1,000,000

None

Annual Gift Tax Exemption

 

$13,000 per donee

 

?

 

?

$13,000

Per class A donee

Maximum Gift Tax Rate

 

 

35%

 

35%

55%

(60% for estates over $10mm)

 

9.5%

Exemption From Generation Skipping Tax

 

$5,000,000

 

$5,000,000

(indexed for inflation)

 

$1,000,000

(indexed for inflation)

TN GST credit is equal to Fed. GST credit

Generation Skipping Tax Rate

 

 

35%

 

35%

 

55%

TN GST credit is equal to Fed. GST credit

 

 

 

The matters discussed here are intended as an alert for our clients and not as legal or tax advice.  You are urged to seek tax and accounting counsel for your particular situation before acting upon topics discussed here.  At Independence Trust Company, we assist our clients in managing and transferring their wealth.  Please contact us with questions or to schedule a meeting.  © 2010 Independence Trust Company

 

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