You've probably heard about the bill being hotly debated in Congress right now that would
reinstate the federal estate tax (from it's current status of repeal) at a 35% rate on estates larger than $5 million ($10 million for married couples). Current reports are indicating that this bill will most likely pass. (Get more information about the bill here.)
What does this mean for you?
If the bill passes, and you and your spouse have an estate (real property, bank accounts, retirement accounts, life insurance, business interests, stocks, bonds, cars, boats, ATVs, etc.) that is less than $10 million, you will likely pay no estate tax if you die in 2011 and beyond (unless Congress decides to change things again). For married couples with estates larger than $10 million, you will be taxed at a 35% rate on everything over that number at the death of the second of you to die. This is good news for many of you.
If this bill does not pass, and you and your spouse have an estate larger than $1 million, you will be taxed at a 55% rate on everything over $1 million. Once you factor in the proceeds of life insurance and retirement accounts, most of you will probably find that your family will be facing a federal estate tax bill upon your death.
What is going to happen in the end? Your guess is as good as mine. If the bill passes, there are a number of my clients who will be very relieved as a result of the estate tax break that it represents.
here in Utah County. Actor Gary Coleman, child star of the smash 1970’s television sitcom, “Diff’rent Strokes,” died in Provo late last month after suffering a brain hemorrhage. Best known for asking, “Whatchu talkin’ bout, Willis?”, Coleman moved to Utah and met his future wife, Shannon Price, during filming for the 2006 comedy, Church Ball. Coleman and Price married in 2007 and then divorced in 2008, although the couple remained close and continued to live together in Coleman’s Santaquin home until Coleman’s death.
Reports. So, what happens to the property of all those people who die without a will? Well, Utah (and most every state) has “intestate” laws that say who gets a person’s property if the person died without a will. What if you don’t agree with what the law says? Too bad. What if you have no idea what the law says? Doesn’t matter. Think it’ll be okay if you just tell people what you want done with your property? Sorry, the laws—and not your unwritten wishes—control, even if everyone knew what your wishes were.
Blog Post by Melissa Platt, Esq.
I am frequently asked by friends and neighbors the following question: "Do I really need an estate plan? I'm not a Rockefeller, after all." My typical response is: "You already have an estate plan. You just need to study it and decide if you're comfortable with it."
I often have clients ask me to include some language in a Will or Trust instrument that threatens their kids with disinheritance if any of them start a fight over the Will or Trust. Such language is commonly known as "penalty," "no-contest," or "in terrorem" clauses. I'm always willing to do so as long as my clients understand the probable outcome of any attempt to enforce such a provision.
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