Proposed New Death Tax?

[greyhoundmom]

My husband was talking to a retired career military and active stockbroker today and he relayed some scary news. He said the way the government is planning to recoup billions of dollars is to pass a new death tax into law by 2011 that basically means once you die 50% of everything you own goes to the government - all property, savings, stocks. The only way around it is to deed your property to your family members before the end of 2010, possibly 2011. Has anyone heard about this? This evidently is not being publicized but comes from a good source. The only way around this is to have a lot of cash on hand, but how many people would liquify assets to do that? Has anyone else heard of this?

[RickG]

It's BS, talk to a financial planner or a tax attorney.

Estate tax in the US is a complex issue with Federal and (possibly multiple) State laws applying. In 2008 the first $2M are exempt; for 2009 the first $3.5M are exempt... okay with me. The legislation needs to be renewed in 2010, just like the Federal budget every year.

Cheers, RickG

[Terry]

Be very, very careful of what you hear in these times. Rumors are everywhere.

[Teddy Salad]

I agree with Rick. Also, a married couple can set up a marital trust (also known as an A/B trust) that doubles the exemptions and defers any estate tax owed until both the husband and wife die. This can be set up in a will (which everybody should have by the way).

According to this http://money.cnn.com/2008/08/06/smallbu ... e_tax.fsb/ Obama is proposing to leave the estate tax the way it is in 2009. That would mean a $7 million exemption for a married couple, $3.5 million exemption for an individual.

[greyhoundmom]

Thanks for the insight. I wouldn't have put it out there but the source sounded convinced that it would happen. Knew my forum guys would have some feedback.