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Handling of Assets (continued)
If a Federal Estate Tax Return is required, the estate process will take longer. Few estates require Federal Estate Tax Returns now. As of January 1, 2006, there is no Federal Estate Tax unless the decedent’s taxable estate is over $2 million. Proper planning for a couple can usually shield double the
exemption from Federal Estate Tax, $4 million in 2006, 2007, and 2008. Note that Congress is continually reviewing the estate tax statutes and this exemption may change.
On January 1, 2009, the exemption for federal estate tax becomes $3.5 million, which means, with proper planning, a family can shield the first $7 million dollars from any kind of federal estate tax. In, 2010, as things stand now, there is no federal estate tax tax and then the federal estate tax returns with a vengence on January 1, 2011. It goes back to a $1 million dollar exemption and the highest rate of the tax jumps from 45% to 50%. Most believe Congress will do something in 2009, but no one is sure what. Many believe that they will retain the exemption of $3.5 million or possibly make the exemption $5 million. However, right now, no one knows for sure what Congress will do.
Usually, after an estate has been opened 5 months, partial
distribution to beneficiaries is possible. If the deceased has less than $50,000 in his or her own name, an abbreviated procedure is available which is less costly, takes much less time and does not require opening an estate.
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