Will my heirs owe taxes on my estate?

Will my heirs owe taxes on my estate? This is a common question many clients have when beginning to discuss their Estate Planning documents with a professional.

If you intend to leave all of your assets to your spouse, estate taxes aren't an issue: You can leave an unlimited amount of money to your spouse tax-free. Otherwise, your estate will owe taxes only if its value - including real estate, life insurance proceeds, retirement accounts and investments - exceeds a certain threshold, known as the estate tax exemption (CNN Money).

Below is a chart that shows the changes in the estate tax exemption and estate tax rate from 1997 through 2015 (Garber 2015).

Historical and Future Federal Estate Tax Exemptions and Rates:
YearEstate Tax ExemptionTop Estate Tax Rate
1997$600,00055%
1998$625,00055%
1999$650,00055%
2000$675,00055%
2001$675,00055%
2002$1,000,00050%
2003$1,000,00049%
2004$1,500,00048%
2005$1,500,00047%
2006$2,000,00046%
2007$2,000,00045%
2008$2,000,00045%
2009$3,500,00045%
*2010$5,000,000 or $035% or 0%
2011$5,000,00035%
**2012$5,120,00035%
**2013$5,250,00040%
**2014$5,340,00040%
**2015$5,430,00040%

If it's all Greek to you, and you have questions about your estate plan, then please consider the advisement of a professional from Burton and Associates LLC to ensure that you are creating a Will and Estate Plan appropriate for your family.

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