You have to be careful about believing everything that you hear, and this is especially true when it comes to matters of estate and financial planning.
There are some urban myths circulating out there, and if you buy into them you could wind up failing to take the appropriate actions. This could ultimately lead to asset erosion as your resources are being passed along to your loved ones someday.
The misguided notion that we would like to highlight here is the assertion that the federal estate tax is only applicable to wealthy Americans. If you fail to plan ahead for the possibility of estate tax exposure based on this belief your family may be in for a rude awakening.
In fact, you do not have to be extraordinarily wealthy to be in the cross hairs of the tax man. A limited quantity of resources can be passed on to your heirs after you die in a tax-free manner. This exemption amount changes all the time. Right now it is $5.12 million and you don’t have to be a Wall Street CEO to accumulate resources in this neighborhood.
However, this relatively modest figure is going to be reduced to just $1 million in the beginning of 2013. And at that time the rate of the estate tax is scheduled to rise from the 35% that is presently holding sway all the way up to 55%.
As you can see, when you look under the surface the estate tax is not exclusively reserved for the very rich. If you would like to take steps to prevent asset erosion given the realities of the estate tax, take action right now to arrange for a consultation with a good South Carolina estate planning lawyer.