02-07-2012, 07:26 PM
cbelt3 wrote:
Having just sat through an estate planning discussion... are you aware of how HUGE the estate tax actually is ?
55% Federal. Each state has their own. This is high... very high.. many countries have estate taxes, but the US's is very high comparatively. Many countries do not.
Any family that owns a business of significant value (> $5M) would have to mortgage or sell it outright in order to 'keep it in the family', unless they do significant estate tax planning.
Which has the effect of moving the tax income from governments to local tax lawyers and financial planners.
Blech.
I know. the "family Farm" argument.... I have a friend whose father recently died. When his mother dies, they will probably have to sell the family farm. They own 5,000 acres north of Columbus, Ohio. Value of that acreage approaches $40M. Acreage slowly accumulated over his grandfather and father's lifetimes.
I know, single point example, but it's not all Mega AgriBusiness out there.
55% starting in 2013 unless a new bill changes the rate. Currently 35% for persons dying this year. As you mention, the first $5 million is not taxed. There are other means to arrange transfer of assets to later generations that can keep them out of the taxable estate as well, that is what having a good estate plan is all about.