According to recent data, less than one percent of estates -- around 0.14 percent -- owed federal estate tax in 2014. That figure may reflect the high federal estate tax exemption, set at $5.43 million for 2015.
Readers have likely heard about the spousal deduction, whereby a spouse can leave an unlimited amount of assets to a surviving spouse without triggering estate tax liabilities. However, does that mean that first spouse's federal estate tax exemption is gone?
The current estate tax exemption for 2015 is $5,430,000. Thatâs a powerful estate-planning tool. It spares qualifying estates from the hassle of filing an estate tax return and paying estate taxes on transferred property.Â
Thanks to a federal law, all property left to a surviving spouse is transferred free of federal estate tax. This rule, found in Section 2056 of the Internal Revenue Code, is sometimes referred to as the marital deduction.
Unexpected expenses can arise in retirement. An unexpected illness may require long-term care or other unexpected expenses. How can one plan for the unexpected, yet leave a bequest to heirs?