Don't Wait Until Tomorrow
Granted, federal estate tax laws might change. But don't let that stop you from taking money-saving steps now.
Federal taxes usually due at death have recently grabbed the attention of the living. A number of Republican lawmakers, as well as GOP presidential hopeful George W. Bush, want to do away with the federal estate tax. Bush's plan would phase out the federal tax on large estates over an eight-year period.
Why the drive for repeal? Critics of the tax insist it's unfair. Congress did make some changes to estate tax laws when it passed the Tax Relief Act of 1997. Under the '97 law, the unified credit was raised over a number of years. In 2000, for example, the credit increased to $220,500. As a result, use of the credit now exempts the first $675,000 of an individual's estate from taxes ($1.35 million for married couples). Also, the credit increases over several years with the effective individual exemption reaching $1 million ($2 million for legally married couples) in 2006.
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