Curiosity and excitement are always to be expected in an election year—especially curiosity about taxes. We all know that each presidential candidate has very different philosophies about where the tax burden lies, how much should be paid, and by whom; but all most of us really want to know is how the implementation of each philosophy might affect us personally.
CNN Money recently published an article which attempts to explain just this: each candidate’s position on various tax policies and how it might carry over to our own wallets. The entire article is very informative, but of course the section that will be of most interest to our office and our clients is what the candidates have to say about the Estate tax. Here’s the scoop:
“Estate tax: Until the end of this year, estates valued at more than $5.12 million are subject to an estate tax up to a 35% top rate. Barring congressional action, the value of estates subject to the tax will fall to $1 million and be subject to a top rate of 55% next year.
“Obama: Would reinstate the estate tax at 2009 levels — meaning estates worth more than $3.5 million would be subject to the tax and face a top rate of 45%.
“Romney: Would repeal the estate tax but preserve the gift tax rate at 35%.”
The thing to keep in mind when reading this is that the tax cuts from a few years ago are set to expire at the end of this year. This means that no matter who gets elected, estate tax laws will be changing come January 1st. Now is the time to get your assets in order, take note of any big changes in your life (either personally or financially) and get in touch with your estate planning attorney. Everyone will want to review/update their estate plan this winter, and the earlier you start preparing the better off you’ll be.