Under the 2001 Bush tax cuts, the federal estate tax expired on Jan. 1, 2010, but only for a year, reappearing on Jan. 1, 2011, with only $1 million in assets exempt from a 55% tax on all assets not left to a spouse or charity. Additionally, a long-standing step up provision, which adjusts the basis of the market value of someone's assets to the value at his or her death, has also lapsed for 2010.
According to
Forbes, there are a number of steps you should take now to protect your wealth:
- Make plans in the event someone dies this year with no estate tax, or next year with only a one million dollar exemption;
- Find your basis for securities and other real assets;
- Consider a non-heir executor in case difficult decisions need to be made; and
- Give to your heirs while you are still alive.
Congress will eventually act, but you should do everything you can to protect yourself and your family until they do.
