Until recently, estate tax planning was one of the top reasons that clients would seek the advice of an estate planning attorney like myself. Previously, the federal estate tax (sometimes called the “death tax”) exemption limit was $2 million, which meant that estates worth more than $2 million owed hefty estate taxes.
In the past 12 years of my law practice, many of my clients were not in any real jeopardy of needing to worry about estate taxes. But after moving my practice from Chicago to the South Bay area of Los Angeles three years ago, I have worked with many clients who will easily exceed the old $2 million limit, thanks to the relatively high cost of real estate here.
Fortunately, the estate tax exemption limit was increased to $5 million in 2013, and will now be adjusted annually for inflation. This means that the average Southern California homeowner will no longer be subject to estate tax. But for larger estates, the impacts of estate tax can be huge, and make proper estate tax planning critical. If you think the value of your assets is currently in excess of $5 million or will grow to that level in the forseeable future, be sure to check out my latest article on Estate Tax Planning.