 |
 |
|
|
 |
| |
|
Welcome to our Library, which provides legal information on topics related to the firm's practice areas. This information is not meant to be a substitute for receiving personal legal advice from an attorney. For specific inquiries about legal issues, we invite you to contact us at (843) 626-9000. We update this section throughout the year, so please check back for new articles. We also welcome suggestions on topics for future articles and news.
|
Providing quality legal services since 1977
|
Jeffcoat Law Firm Article
2006 Law Changes That May Affect Your Estate Plan
By: Otis Allen Jeffcoat, III
July 6, 2006
2006 has brought several important changes in the tax law that may affect your estate plan. They include:
Federal Estate Tax Exemption Increased to $2 Million. The amount that you may pass to your heirs free of federal estate has increased to $2 million (up from $1.5 million in 2004 and 2005). A married couple can (with proper estate planning) protect up to $4 million in family assets from the federal estate tax. This exemption amount will remain at $2 million for 2006, 2007 and 2008, unless congress changes the law.
State Estate Tax Exemptions. South Carolina remains coupled with the federal estate tax scheme, which essentially means that there is no state estate tax in this state. Effective January 1, 2006, North Carolina decoupled from the federal estate tax scheme. While the amount you may pass to your heirs free of NC estate tax has also increased to $2 million, unlike South Carolina, if you have to pay federal estate tax, now you also must pay state estate tax.
Annual Gift Tax Exclusion Increased to $12,000. The amount that you may give to an unlimited number of loved ones free of federal gift tax has increased to $12,000 per year (up from $11,000 in 2005). Married couples may make joint gifts of $24,000 per year per donee without tax consequences.
Federal Estate Tax Rate Changes to 46%. The federal estate tax rate dropped to 46% (from 47% in 2005). Thus, when a federal estate tax is payable, the taxable amount over $2 million pays federal estate tax at the rate of 46%.
Is It Time To Review Your Estate Plan? If your assets have grown significantly in value in the last few years, or if your life insurance coverage has increased, it may be time to review your estate plan to take advantage of changes in the law. If your estate size has not increased a great deal, and if your and your spouse’s combined taxable estate is less than $2 million, you may be able to simplify your estate plan.
|
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
|
Jeffcoat Law Firm, LLC.
Phone: (843) 626-9000
Fax: (843) 448-1914
Map & Directions
|
Beach First Center, 3751 Grissom Parkway, Suite 201
P.O. Box 3678 · Myrtle Beach, SC 29578-3678
119 Pinnacle Place, Suite B, Little River, SC 29566
12019 Ocean Highway · Pawleys Island, SC 29585
10140-8 Beach Drive, SW · P.O. Box 44000 · Calabash, NC 28467
|
|