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FEDERAL ESTATE TAX For the years 2001 through 2011 Under the Economic Growth and Tax Relief Reconciliation Act of 2001, significant changes that affect your estate and your estate planning became law. The Estate Tax is reduced over a ten-year period, repealed for one year, and then resurrected the following year. Below are charts that demonstrate the effects of the new law:
Because the Congress could not agree on repeal or reform, a compromise was Reached and is reflected in the above chart; and then, significantly in the year 2011, a return to the exemption in effect in 2002 and the tax rate in effect in 2001. In all likelihood, Congress will make changes that will address the repeal now set for 2010 and although it is the consenus that there will be FET relief, it will probably not be in the form of a repeal, but rather maintaining lower rates and higher exemptions. THE FEDERAL GIFT TAX
1 This amount to be adjusted upward each year for inflation.2 This is the total life time amount* and is addition to the annual FET exemption.Whatever amount is used in one calendar year will reduce the life time amount for future years. i.e., it is not a yearly exemption, but rather a cumulative exemption up to $1,000,000.00 total. THE GENERATION TAX EXEMPTION (GST)
1 Total you can give to your grandchildren without paying GST Tax (during life or at death).2 Highest rate of Federal GST Tax on amounts given to grandchildren in excess of the GST tax exemption. Ó2003 James
W. Pearson, Jr., All Rights Reserved FOR
ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-800-232-1477 E-mail: lawyer@lawwalk.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. |
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