Inhertitance Tax

[Anonymous]

Is it true that anything under 2 million is not taxed? How does this work?

[Anonymous]

Yes that is the number for 2008 (although the number is subject to change each year right now, as it gradually goes up, then down as part of Bush's expiring tax cuts).

I believe you file an estate tax return, and everyone is entitled to a credit against taxes owed, and the credit is high enough that you won't owe anything if you have $2 million or less in the estate.

Also, I think you can leave unlimited amounts to your spouse without triggering the estate tax (so I think the first level of estate planning, for people who have more than $2 million, is to leave some assets to your children, and then leave the rest to your spouse, which effectively doubles the exemption for the assets of a married couple).

[Anonymous]

Anonymous wrote:Is it true that anything under 2 million is not taxed? How does this work?

I like to refer to it as the Death Tax.

Sugar - coating it by naming it the "inheritance tax" doesn't sound as harsh or applicable to folks.

Also, I think if you can bundle your assests, property, etc. into a trust fund, then it makes it much easier to deal with at the time of death (as if you don't already have enough on your mind...setting up a trust makes things that much smoothier).

[Anonymous]

Or a "pre-paid" life insurance. The down side of that is that the person that has the money and plan on leaving it to the spouse, children, etc, would not have access to that ammount he/she set aside.

Ex.: if you plan on leaving 1 million dolars to your spouse/children, but does not want it to be taxed (death tax), you can buy a insurance policy in that ammount.

[Anonymous]

Or do what hubby and I plan--whichever of us dies first-the other is heading to Bermuda and giving up our US citizenship. No way no way am I working my entire life to have my money stolen--it's going where I want it to go. Sorry Obamunism is going to get us without a good ole fight.

[Anonymous]

Anonymous wrote:Or do what hubby and I plan--whichever of us dies first-the other is heading to Bermuda and giving up our US citizenship. No way no way am I working my entire life to have my money stolen--it's going where I want it to go. Sorry Obamunism is going to get us without a good ole fight.

I think the question was raised in another thread: What does "Country First" mean? Presumably this is PP's answer.

[Anonymous]

Anonymous wrote:Or a "pre-paid" life insurance. The down side of that is that the person that has the money and plan on leaving it to the spouse, children, etc, would not have access to that ammount he/she set aside.

Ex.: if you plan on leaving 1 million dolars to your spouse/children, but does not want it to be taxed (death tax), you can buy a insurance policy in that ammount.

I'm not sure, but I don't think this is true, unless you go to the trouble of setting up a trust to "own" the policy.

[Anonymous]

if you or the loved one can die in 2010, there is no estate tax that year.