Baby Boomers and estate taxes

For we baby boomers who are concerned about our estates, the matter of the Federal Government repealing the estate tax has led to some prognostication; however, many believe that Congress will just freeze the UNIFIED CREDIT EQUIVELENT at some set amount. The amount of exemption has been steadily increasing over the years: In 2002 it was $1mm; In 2004 it was $1.5mm and beginning this year it is $2mm. In 2009 it is projected to be $3.5mm. What this means is the first $2,000,000 of your estate at death is not subject to Federal estate taxes. Anything over $2,000,000 is taxable.

Also, since 1981 the ANNUAL GIFT TAX EXCLUSION remained at $10,000. In 2002 it was increased to $11,000 and for 2006 the annual gift tax exclusion has increased from $12,000. This is a good way of gifting portions of your property to your children. You can do this in conjunction with establishing a Trust. You must remember to have a professional appraisal done every two years.