Though some people would prefer that it was otherwise we have an estate tax in place on the federal level. This is applicable in all 50 states. The amount of the estate tax exclusion in 2013 is $5.25 million, and the top rate of this death levy is 40%.
Not every state has an estate tax on the state level, but here in Connecticut we are not among the fortunate. The Connecticut state estate tax exclusion is just $2 million. As a result you could be immune from the federal estate tax but still find yourself exposed to the estate tax here in the state of Connecticut.
If your assets do not exceed $2 million in value you may breathe a sigh of relief, and rightly so. However, this does not mean that you do not need to have a well constructed estate plan in place.
While it is true that people who have assets that are in taxable territory must take steps to gain tax efficiency as they create an estate plan everyone should have an estate plan in place. This is true for senior citizens, but it is also true for adults of all ages.
Different circumstances call for different courses of action. For example, if you have a spendthrift heir you can take steps to protect this person from his or her own potentially bad decisions. If you have someone with special needs in the family you can arrange for assets to be made available to this individual without impacting government benefits with the proper planning.
The wise course of action is to discuss your unique family situation with a licensed estate planning attorney so that you can go forward with a custom crafted estate plan that is perfect for you and your family.
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