Regardless of your political persuasion, the recent events in our nation’s capitol have been breathtaking and, with an election soon at hand, the drama will most certainly continue. While there are many uncertainties at this point, there are some things that we do know. First, our country has more debt than most of us can even comprehend. Second, the economy is on tepid ground and the problems facingEuropewill most certainly affect our recovery. Finally, neither side of the political isle in Congress has shown a willingness to work together.
What does this mean for you and me? For the last few years most of us have not had to worry about estate taxes. Only if your estate was worth more than $5 million ($10 million for a married couple) would you have to be concerned about paying this tax. As of January 1st the Federal Estate Tax Exemption will drop from $5 million to $1 million. Every dollar in your estate over that threshold will be subject to a tax of up to 55%.
The number of Americans with an estate worth over $5 million is a relatively small number but when the exemption drops in 2013, millions of Americans will now be subject to estate taxes. Keep in mind, your estate includes your home, life insurance, retirement accounts, savings and much, much more. How long did it take for you to earn all of the money in your IRA? How long did it take to pay off your home? How much work to build up your savings? Those assets took time and work to accumulate and should pass to your loved ones, not Uncle Sam.
We all wish we had a crystal ball to see the future. It would be nice to know for certain what the taxes will actually be when we die, or for that matter it may be nice to know the day we were going to die. Unfortunately, there is no crystal ball, but there are things you can do to prepare. There are many tools available to help minimize or avoid estate taxes, such as a Living Trust. Of course everyone’s situation is different and your planning should custom fit your needs. Proper planning can help you pass more of what you worked so hard for onto your family rather than the federal government. Remember the saying, “If you fail to plan, you plan to fail”. You have to take the first step and MHK can help!
Contact MHK today at 888.804.5340 to schedule a free consultation to secure your future.
Contributed by MHK Phoenix attorney West Hunsaker
About Morris, Hall & Kinghorn:
At Morris, Hall & Kinghorn, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.804.5340 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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