Gift and Estate Taxes

Every estate may exclude a certain amount of property from estate taxes. In 2009, that amount is $3.5 million. Furthermore, you may give away up to $1 million during your lifetime tax free, but doing so will reduce the amount you are able to transfer tax free at death. This gift tax exemption applies to gifts that do not qualify for the annual exclusion.

Efforts to make the estate tax repeal scheduled for 2010 permanent, or to extend the increased exemption, continue. The chart below outlines the scheduled changes in gift, estate, and GST tax exemptions.

As you plan your estate, state taxes should also be considered. Many states have decoupled their death tax systems from the Federal estate tax. To avoid unanticipated state death tax obligations, your estate plan must address the laws of each state in which you own property.