Q What is the 2017 Estate Tax Exemption Limit and Why is it Important?
Essentially, the Estate Tax is a tax on a person’s right to transfer property upon his or her death.
The “Gross Estate” includes everything from cash and securities to business interests to real estate. Basically, everything a person owns. Tax deductions are taken from the Gross Estate to create the “Taxable Estate.”
If a person’s Taxable Estate is over the exemption limit, $5,490,000 for 2017, the estate will be taxed at a rate of forty percent (40%). It is important to understand what the Estate Tax is and why it could affect your estate, whether you are over or under the exemption, because it will dictate the type and complexity of your estate plan.
It is best to work with a qualified attorney to determine the most viable estate plan for you based on your planning goals and objective.