What’s Going on with Federal Estate Taxes?

Should You Care and What Should You Do

For the year 2010 only, the federal estate tax been repealed. The tax is to be reinstated again in 2011 with a lower exemption from tax and a higher rate of tax. The repeal this year is accompanied by the loss of a step-up in basis for inherited assets (with exceptions). The Minnesota estate tax has not been repealed. The repeal of the federal estate tax causes uncertainty and may necessitate a review of your current estate plan.

Click here for a more detailed summary of the changes that have been made to the federal estate tax, how it may affect your current estate plan and what actions you may want to consider.

If you wish to consult with an attorney to ensure that your current plan accomplishes your goals, particularly in light of the current uncertainty in the federal estate tax law, please call our office to schedule a review.

Increase to Amount before Probate Required

Before a recent change in the law, an individual could avoid probate at death if they did not own more than $20,000 of probatable assets. That amount has changed and is now $50,000. If you have any questions as to the significance of this change and how it affects you, please call our office.

Transfer on Death Deed

Minnesota law allows individuals to have a Transfer on Death Deed (TODD) for real estate.. Prior to this change in the law, an individual could use a Transfer on Death (TOD) designation for securities and a Payable on Death (POD) designation for bank accounts to avoid probate for these assets. Now individuals may use a TODD to avoid probate for real estate in Minnesota.

Please call our office if you wish to discuss the use of a TODD in your estate plan.