Federal Gift and Estate Taxes

The money or property that you own when you die (also known as your “estate” or “gross estate”), may be subject to federal estate taxes and some form of state death taxes. It’s wise to understand these taxes and how they might apply to your situation. This is more true since the passage of the Economic Growth and Tax Relief Reconciliation Act of 2001, or the 2001 Tax Act. As with any new tax laws, this law may make life more complicated and uncertain.

Estate Planning Basics

You may think that you’re too young or too poor to plan an estate. If you die, however, no matter how poor or rich you judge yourself, your family may be grateful if you leave directions on how to distribute your worldly goods. A simple will, for instance, will help survivors understand what to do with your car and furniture. If you’re wealthy, more elaborate plans can help you to avoid estate taxes.