Are you ready for a big tax bill?
For the past several years, the majority of us have not had to worry about paying estate taxes.? For example, in 2012, if your net worth is less than $5.12 million, you do not have an estate tax issue.? ?Unfortunately, unless Congress acts quickly, that exemption amount is about to decrease dramatically.? Effective January 1st, 2013, you could face an estate tax if your net worth is $1 million or more.? The tax rate that will be applied is a whopping 55%.? That means that your loved ones could end up with an extraordinarily high tax bill if you don?t take action now, before it?s too late.
Think your estate is too small for these changes to affect you?
Think again.? If you own a home, a life insurance policy, or other significant asset, your estate can very quickly reach that $1 million threshold.? Further, if you are a Massachusetts resident, that state imposes its own additional estate tax. New Hampshire residents may not have to worry about a state level estate tax, but they will face a tax of 55% on their assets over $1 million.? The unfortunate result is a hefty tax bill for your estate.
What can you do about it?
Fortunately, with proper planning techniques, you can reduce, or even eliminate, your potential estate tax.? Why give away such a large portion of your assets in taxes if you don?t have to?? There are also unique gifting opportunities that are available, but you must act fast.? These opportunities will expire at midnight on December 31st.? Until that time, you are able to give away approximately $4 million more in assets, tax free, than you will in 2013.? This opportunity will likely never come around again, so your window in which to act is rapidly closing.
We strongly urge that you not delay in putting together a plan to reduce your taxes, manage your assets, and avoid expensive and lengthy probate proceedings after you pass.? Whether you currently have an estate plan or have not yet created one, now is an important time to meet with us.? Call Hudkins Law today at (603) 434-1770 to schedule a free consultation.? We also welcome your emails at: Candice@hudkinslaw.com.
Legal resources:
Internal Revenue Tax Law ? Section 2001
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Economic Growth and Tax Relief Reconciliation Act of 2001
Hudkins Law is conveniently located in both Windham and New London, New Hampshire.? Our firm specializes in residential and commercial real estate law as well as estate planning and corporate law.? We are licensed in Massachusetts and New Hampshire.
photo courtesy of Tax Credits
Source: http://blog.verani.com/changing-estate-tax-laws/
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