how much can you transfer free of the estate tax?

ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF

HOW MUCH CAN YOU TRANSFER FREE OF THE ESTATE TAX?


HIGH NET WORTH INDIVIDUALS


If you have been very successful from a financial

standpoint, you have to be concerned

about the estate tax.


The estate tax carries a maximum rate of 40 percent.


This tax can take a heavy toll on your financial legacy.


MARITAL DEDUCTION

There is an unlimited marital estate tax deduction.


You could use this deduction to transfer any amount of

property to your spouse free of the estate tax.


However, to use this deduction, your spouse must be a citizen

of the United States.


ESTATE TAX CREDIT OR EXCLUSION


When it comes to transfers to people other than your spouse, you could use the

estate tax exclusion to transfer a certain amount tax-free.


During the current calendar year, the federal estate tax exclusion is $5.45 million.


INFLATION ADJUSTMENTS


Each year, the estate tax exclusion can be adjusted to account for inflation, so you may see a somewhat larger

figure in 2017.


PORTABILITY

The estate tax exclusion is portable between spouses.


This means that a surviving spouse could use the exclusion that was allotted to his or her

deceased spouse.


As a result, in 2016, a surviving spouse would have a total exclusion of $10.90 million.


FEDERAL GIFT TAX


You cannot give gifts while you are living to avoid the estate

tax, because there is a federal gift tax.


The $5.45 million exclusion is a unified exclusion.


It applies to your estate along with the large gifts that you give during your

life.


In Maryland, there is an estate tax on the state level.


The exclusion for the Maryland state estate tax is $2 million in

2016, $3 million in 2017, $4 million in 2018, and same as

the Federal exemption in 2019.


INHERITANCE TAX

Maryland also has an inheritance tax.


This tax is levied on transfers to each individual nonexempt

inheritor.


WEALTH PRESERVATION CONSULTATION


If you are concerned about how taxation can impact your

legacy, our firm can help.


Contact us at (410) 573- 4818 to set up a consultation.


Or visit our website www.sinclairprosserlaw.com

Nicole Livingston Jon J.

Gasior

Colleen SinclairProsser Victor A.

Lembo

how much can you transfer free of the estate tax?

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