Though it never went away in Massachusetts, the last few years have been a respite from worry over federal estate taxes. That may soon come to an end. The government may be trying to get their hands into your and your loved ones’ pockets again – – and in a VERY BIG way!
We can’t predict who will win in November and which party (or parties) will control the Presidency, Senate, and House. But we do need to let you know what may happen if Democrats wind up winning the Presidency and having a majority in the House and Senate, an event which is looking increasingly likely according to recent polls. Dennis Sullivan & Associates is not taking a polical stand, we’re a diverse and divided office politically, but we do want to discuss how taxes may change, and what actions can be taken now, so please don’t shoot the messenger!
Democrats and media have raised significant issues about the wealth and income inequality rampant in our country. One solution for this inequality, now being expressed more vocally, is a major overhaul of the federal estate tax. For example, here’s an article that appeared this summer in the New York Times, entitled
The current Estate Tax exemption, the amount that can be passed at death tax-free, is $11.58 million (potentially twice that for a married couple). In short, very few people in the US need to worry about federal estate taxes.
In Massachusetts, we have an estate tax exemption of $1 Million dollars. If you are married, there is no automatic doubling of the exemption, but it is possible with planning to double the amount to $2 Million for a married couple.
However, as the cited article recommends, that exemption may be significantly reduced at any time. While the current exemption is $11.58 Million, if it changes before you die, that is the exemption that applies to you. The only exemption that counts is the one in the law when you pass away – – and a new Congress and President could change that. There have already been calls to reduce the Estate Tax exemption to as little as $1 million, with everything over that taxed at 40% or more, which would place many Massachusetts homeowners’ families at risk of owing federal estate taxes!
What Can You Do? Why Do It Now, Why NOT Wait Until November?
There planning techniques, beyond a Living Trust, that you can use now to take advantage of the current large Estate Tax exemption while it’s still in the law. Dennis Sullivan & Associates can help.
If you wait until the November election, there may not be enough time before year end to analyze your options and properly put into place the appropriate strategies. You may want to do some “pre-planning” now, make your choices ahead of the election and be ready to implement them right away after election day.
Don’t wait until next year. It’s likely that any Estate Tax change is likely to be made effective retroactively to January 1! Don’t see your planning opportunities dry up.
Call our office for a free consultation. Don’t wait, review your estate tax planning options now! Call 781-237-2815 to learn more!