Tag Archives: California

Do You Still Need an Estate Plan if You are Not Wealthy? (Part 1)

Estate Tax Returns Filed and Total Net Estate Tax, 2003–2012

Source: IRS, Statistics of Income, August 2013

The IRS recently released a statistical report entitled “Estate Tax Returns filed for Wealthy Decedents, 2003-2012”.  Some of the more interesting statistics in the data collected were:

  • The number of estate tax returns declined 87 percent from about 73,100 in 2003 to about 9,400 in 2012 primarily due to the gradual increase in the filing threshold.
  • The gross estate filing threshold was $5.12 million in 2012, up from $1.0 million in 2003.
  • In 2012, the total net estate tax reported on all estate tax returns filed for the year was $8.5 billion.
  • California had the highest number of estate tax returns filed in 2012, followed by Florida, New York, Texas, and Illinois.
  • Estate tax decedents with total assets of $20 million or more held a greater share of their portfolio in stocks (about 40 percent) and lesser shares in real estate and retirement assets than decedents in other total asset categories

Does the significant decline in the number of estate tax returns (due to the threshold for such returns increasing to $5.12 million in 2012 from $1 million) mean that only the “wealthy” (i.e. those with estates in excess of $5.12 million based on the 2012 threshold), need to be concerned about an estate plan and the avoidance or minimization of estate taxes?  Absolutely not.

While the avoidance and/or minimization of estate taxes is certainly one good reason to engage the services of an estate planning attorney, there are a number of other reasons to consider which will be discussed in part 2 of this blog series.

Estate Planning: What You Should Know

What is an Estate Plan?

An estate plan is a complete set of instructions that convey your wishes upon your incapacity and/or death.

Why Should I Create My Own Estate Plan?

Without a personalized estate plan the State will decide who gets what and when.  The State’s idea of what your heirs should receive may not be the same as your own.  With an estate plan, you can avoid the time and cost of having the State decide your affairs.  It is essential that you take an active part in preparing your estate plan.

When Should I Start to Prepare My Estate Plan?

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