Question 5

5.  Is the IRS going to be your biggest heir?

    Many people are not aware of what is included in the gross estate for IRS valuation purposes.  It doesn't take much in the 21st Century for an estate to reach $1,000,000.  A million dollars may seem like a lot of money, but it doesn't take that long to reach it if you consider that the face amount of life insurance is countable as well as the market value of real estate. Depending on the stock market this figure could creep up on many american's faster then they would think.

    At $1,000,000  the IRS will start receiving at least 41% of anything above that amount increasing to 50% by the time the estate reaches a much higher amount.   In other words, at some point of time the IRS can start getting more of an estate than all the rest of the beneficiaries put together. Inflation is causing far greater exposure to the federal estate tax than ever before.  Most families are doubling their net worth every 10 years.  Because of the recent stock market changes, many families have doubled and tripled and their estate size in the last 5 years before the market turned volatile. If an estate size doubles from  $750,000 to $1,500,000, the IRS tax increases more than 6 times.  If it tripled in size, the IRS share increased 14 times.  Remember that proper estate planning can avoid every cent in estate taxes from having to go to the government unnecessarily.

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