Estate Tax Update In June 2001, President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001. May people may think that this law has now effectively repealed the federal estate tax. Actually, the final repeal of the estate tax does not go into effect fully until January 1, 2010 - and then only if there are no changes in the law between now and then. During this time, there will be gradual increases in the estate tax exemption amount and a decrease in the top estate tax bracket, currently 55%, down to 45% starting in 2007 - making fewer estates liable for the tax. The tax itself, however, does not go away completely until 2010. Because of Congressional budget rules, the repeal of the estate tax is only temporary. Most of the provisions in the tax bill concerning the estate tax expire in 2011. Unless the sunset provision in the current law is not repealed, we could see the estate tax back at the original 55% rate in 2011 unless a future Congress extends the repeal. Following is a schedule of changes to the estate tax exemption and estate tax rates.
| Calendar Year | Estate Tax Exemption | Highest Estate and Gift Tax Rates | | 2001 | $675,000 | 55% | | 2002 | $1 million | 50% | | 2003 | $1 million | 49% | | 2004 | $1.5 million | 48% | | 2005 | $1.5 million | 47% | | 2006 | $2 million | 46% | | 2007 | $2 million | 45% | | 2008 | $2 million | 45% | | 2009 | $3.5 million | 45% | | 2010 | Estate Tax RepealedUnder the Bill (Gift Tax Only) | | 2011 | $675,000 | 55% |
You may be wondering what this all means and whether you need to sit down with your attorney or financial advisor to see how the new tax law affects you and your estate plans. Changes in the tax laws, as well as major developments in our personal lives, provide the impetus to take stock of our estate plans and charitable giving - now and in the future. Such changes provide opportunities for us to review and to rethink our plans for the future. Now is the ideal time to review your will and other estate planning documents in light of recent changes and to make sure they are compatible with the law and that they adequately reflect your wishes. For your own peace of mind and for the protection of your family, use this opportunity to review your plans with a trusted, qualified estate planning professional.
We would be pleased to work with you and your financial advisors to develop a plan that fits your needs and objectives.
For more information, please contact:
World Society for the Protection of Animals
Lincoln Plaza
89 South Street, Ste. 201
Boston, MA 02111 E-mail: wspa@wspausa.org
Phone: 1-800-883-9772
Fax: 617-737-4404 WSPA does not seek to replace the advice of your own tax counsel. Please consult your own advisors before taking action. Figures are for illustration purposes only and are subject to change. |