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Nagging Estate Questions Answered … For Now

Uncertainty about estate taxes has been settled – at least for now – by the American Taxpayer Relief Act, signed into law by President Obama in January 2013.

For decedents who die after Dec. 31, 2012, the top estate tax rate is 40 percent on estates valued at $5 million, indexed for inflation. The exempt amount is $5.12 million for 2012.


In addition, the act made the portability election permanent. This election allows a surviving spouse’s estate to benefit from the deceased spouse’s unused exemption, providing shelter for married couples with an estate worth at least $10 million. Because of the way the estate tax credit works, any estate with taxable assets above the exempt amount will pay the 40 percent tax rate.

The act also extends provisions affecting the following:

  • Qualifying easements
  • Qualified family-owned business interests
  • Installment payments of estate tax for closely held businesses
  • Repeal of the 5 percent surtax for estates larger than $10 million

Now that the nation has more clarity about estate tax issues, it’s a good time to schedule an appointment to talk with your CPA about ways to protect your estate.

When selecting an auditor, the Council on Social Work Education sought a firm that could bring the greatest technical expertise to our organization. I remember my first meeting with Terri McKnight. As a new Executive Director, I felt very confident that she and Gelman, Rosenberg & Freedman had a handle on the nonprofit industry and could help us make better financial decisions for our environment.

Dr. Julia Watkins |  Executive Director
Council on Social Work Education