If you are like most people, you don’t really know right off the cuff what your estate is actually worth. Let’s start off by defining what your estate actually is. Your estate consists of all of the property you own or control. Your estate property may be in your sole name, held in a partnership, in a joint ownership arrangement, or through a trust. Your estate property also includes all other monies that would be generated upon your death, such as through life insurance.
Here’s a link to a cool 11-step wiki to help you figure out the value of your estate. http://www.wikihow.com/Calculate-the-Value-of-an-Estate
The good news is you can transfer an amount that equals up to your available exemption at death without having to be subject to federal estate taxes. If your taxable estate is equal to or less than the estate tax exemption (for 2016, $5.45 million) reduced by any gift tax exemption you used during your life, no federal estate tax will be due when you die. But if your taxable estate exceeds this amount, it will be subject to estate tax. Many states, however, now impose estate tax at a lower threshold than the federal government does, so you’ll also need to consider the rules in your state. Here in Virginia, legislation enacted by the 2006 General Assembly, House Bill 5018, repealed the Virginia estate tax for the estates of decedents whose date of death occurs on or after July 1, 2007. The repeal of the Virginia estate tax does not affect the filing requirements for fiduciary income tax, regardless of when the date of death occurs.
Even if you don’t have a $5 million estate now, it doesn’t mean that you won’t one day. The estate tax exemption amount changes every year so it’s a good idea to keep tabs on your net worth and any changes from year to year in your personal financial position. Check with us for advice and guidance.