When the ball dropped on New Year’s, it signaled more good news for the fairly wealthy and their heirs — the exemption from federal estate taxes jumped to $5.43 million for those who die in 2015.
That’s up from $5.34 million last year.
Still, most folks don’t need to worry about that. They don’t have estates valued that high. For most, the focus should be on threats to an estate, such as capital gains, income taxes and state estate taxes, says a story on news.investors.com.
And state estate taxes are in flux in many states. Fifteen states and the District of Columbia levy such taxes. In 13 of those states, the exemption is lower than the federal exemption.
For those living in states that do levy estate taxes, there are various options. People can move to another state, of course. Or they can give away property while they are alive.
But the strategies can be complicated. For example, someone who is in his or her final years should not give away an asset they bought for $10,000 if it is now worth $200,000. If they do, their heirs would owe more when they were to sell the property than if it was received as a bequest.
There are also a number of kinds of trusts that can be employed.
Best to seek the advice of a qualified estate planning attorney.