2015 Estate Tax Repeal?
- DATE: March 27, 2015
- POSTED IN: Blog , Estate planning
- TAGS: Estate Planning , Rhode Island Estate Tax
- POSTED BY: Gene Kirzhner
Very soon, the Congressional House Ways and Means Committee will vote on a repeal of the federal estate and gift tax. If the measure gets through the committee, it would then move on to a full vote in Congress, before being decided upon by the Senate.
Currently, the federal estate and gift tax threshold is $5.43m for individuals who pass away in 2015, up slightly from 2014’s $5.34m mark. However, with “portability” still part of the federal estate and gift tax rules, a surviving spouse may use whatever portion of his or her deceased spouse’s estate tax credit was unused.
For example, if husband dies having only used $1m of his total $5.43m estate tax credit, his surviving spouse’s estate may use husband’s remaining $4.43m of estate tax credit. If husband dies using none of his available credit, the entire amount “passes” to his surviving spouse for her use.
This means that married couples with estates smaller than $10.86m have little to worry about in the way of federal estate taxes. A repeal of the federal estate and gift tax would eliminate this concern altogether.
Estate Tax Concerns
However, clients should be aware that on the state level, estate taxes remain a real and serious concern. In Massachusetts, estates larger than $1m are potentially subject to an estate tax, and in Rhode Island, the cap is only slightly higher at $1.5m. Often, couples with a home, investment and/or retirement accounts, and life insurance have already exceeded these small caps.
Both married couples and individuals should consider these figures when meeting with their estate planning attorney. Proper estate planning, whether through a trust, lifetime gifting, or charitable bequests from one’s estate, can greatly reduce, and in many cases eliminate, the estate tax boogeyman.
To discuss how Massachusetts and Rhode Island estate taxes might affect you, call our office to schedule a free consultation. And remember, “we make housecalls”!