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Published December 17, 2012, 04:02 PM

Attorneys Say Fiscal Cliff Could Affect Your Estate Plans

Time is running out for Washington lawmakers to head off the so-called "Fiscal Cliff" by the year's end. Higher tax rates are far from the only thing that could result.

By: David Schwab, WDAZ

Time is running out for Washington lawmakers to head off the so-called "Fiscal Cliff" by the year's end. Higher tax rates are far from the only thing that could result.

The federal estate tax exemption is set to drop to $1 million from the current $5.12 million. This affects anybody who will be gifting a large estate next year. That includes family owned businesses such as farms.

Families with more than $1 million in assets are rushing to set up trusts in order to get some of these assets out of their estate by year's end. Anything over that amount will be now subject to federal estate tax. Also, if the fiscal cliff legislation is not in place by January 1st the maximum estate tax is set to jump to 55 percent from 35 percent. Because of sky rocketing land prices more land owners could be affected locally.

Estate planning attorney Josh Muro says it's likely when the fiscal cliff legislation is finally approved the federal estate tax exemption will be set at $3.5 million. Muro say families with any questions should contact an estate planning attorney this week.

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