Date: Jan 08, 2013

The recent passing of the fiscal cliff brings higher income taxes for some, but everyone caught a break with a permanent resolution to the estate tax quandary. Estate tax parameters have changed nine times between 2002 and 2012.  However, for the first time in 12 years there is longer-term certainty in the tax code with respect to the estate tax. The American Taxpayer Relief Act of 2012 (H.R.8) permanently instituted a $5 million exemption level indexed for inflation, a 40% top rate, spousal transfer, and a stepped-up basis.  This means that for estates valued at $5 million or less ($10 million if the estate is part of a combined spousal property) you pay no tax upon the transfer of the estate.  Estates valued at more than this threshold would be subject to a top tax rate of 40%. The estate tax rate was scheduled to return to 55% with only a $1 million exemption level in 2013. The passage of H.R. 8 will provide the certainty family-owned businesses need to conduct proper and effective estate tax planning.   

For more information about the estate taxes please contact Matt Lewis, vice president of investments with Western Growers.  Matt and his team can help you access information on why estate planning is important as well as assist with other financial service planning. For more information on federal tax policy please contact WG’s Ken Barbic.

WG Staff Contact

Matt Lewis
President, WGFS
949-885-2379

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