life insurance

Estate Tax Reform: Why Millionaire's Aren't Batting An Eye


Since 2002, the estate tax rate has been gradually decreasing, while exemptions levels have been steadily increasing. These elements combined have been paving the way for a complete repeal of the estate tax in 2010. Any inheritance that an heir chooses to sell will then be subject to capital gain taxes. But in 2011, there is a sunset revision, which will put the estate tax back into effect.
Opinions on what will happen vary, some millionaires believe the repeal of the estate tax will leave them paying less, some believe they will end up paying more, while others think the repeal will have no effect on their estate taxes at all. Many "high net worth individuals," meaning those who have more than $1 million in assets not including a home, aren't batting an eye to the estate tax reform. Studies show that many are keeping with their current plans on inheritance, and waiting to see what happens when the reform goes into effect. Also, many are planning to:

.Consult with a financial advisor on estate planning
.Increase or maintain charitable donations
.Leave trust fund where they are
.Leave life insurance policies where they are
.Increase or maintain plans for tax advantaged giving

Not many high net worth individuals plan to terminate trusts, decrease their donations to charities or children, or drop their life insurance plan completely.