August 30, 2014

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The government could get much more of your money

If you have more than $1 million in assets, an important deadline is fast approaching to take advantage of some of the most generous estate tax rules of the past century. Until December 31, 2012, the rules say, it is possible to transfer up to $5.12 million of your estate (and twice that amount for couples) free of federal tax. Next year, unless the sharply divided Congress extends the current rules or enacts new ones, the lifetime exemption drops to just $1 million. The federal estate tax on assets over that limit would spike from the current 35% tax rate to 55%, and that’s not even including estate taxes imposed by individual states.