The estate tax is one of the most controversial taxes passed and for about 11 years estate planning attorneys have been wondering what will happen. As Congress debated the fiscal cliff tax changes in December, many feared that estate tax limits could roll back to $1 million, the levels that were in place when Bill Clinton was president and a level that could have affected many middle class families. And with tax season looming, many were wondering how they could be affected in the future.
The final deal put the estate tax exclusion at $5.25 million for 2013 at a rate of 40 percent for individuals. In other words, if you don’t have an estate that large you don’t have to worry about estate taxes.
There is even better news for married couples. A surviving spouse can use the remaining portion of their spouse’s exclusion. That means a married couple can exclude $10.5 million from taxes. But if you don’t have that exclusion transferred to the surviving spouse you will not be allowed to file that exclusion. It’s important you get with a Michigan estate planning lawyer who can help you determine how much exclusion you can receive if you are the surviving spouse.
If you are required to pay the estate taxes, you have nine months after the death of your loved one to file and a six month extension if needed. If the return is not filed in time, the exemption could be lost.
While 22 states have some form of estate tax, Michigan does not. So, as a Michigan resident, you only have to worry about the federal estate tax after death.
Taxes and estate planning can be complicated. Each case and each family is different. If you have any questions about how the new estate tax may impact you or your family, please call me to talk about it.
_____________________________________________________________________
Glenn Matecun is a Michigan elder law attorney. His law firm regularly handles elder law, elder care, probate court and estate planning matters (Living Trust, Irrevocable Trust, Living Wills, Power of Attorney, Wills, Medicaid law and asset protection), and he works with clients throughout Southeastern Michigan, including clients in Livingston County (including Howell, Brighton, Hartland, Fowlerville and surrounding areas), Macomb County (including Clinton Township, Shelby Township, Sterling Heights, Mt. Clemens and surrounding areas), Wayne County, Ingham County (Lansing) and Washtenaw County (Ann Arbor). To learn more about other legal questions, including the question: “What is elder law?”, go towww.MichiganEstatePlans.com. (Search terms: Michigan elder law lawyer, eldercare, elder care in Michigan, Michigan Medicaid planning, elder abuse, senior abuse, elder attorney, Medicaid rules, senior law, elder lawyers, nursing home attorney, elder laws, elder abuse law, elderlaw).