Federal Estate Taxes
The material found on this site is for general information only. Concepts included on this site dealing with federal estate tax issues may not be the most acceptable or best solutions to your situation. You should consult your attorney for advice on your particular situation.
The Federal Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. Sometimes, federal estate tax is dismissed as a non-issue because people think they have to be rich before they are taxed. However, did you know that everything you own, possibly including your retirement plans and life insurance proceeds, is includible in your gross estate and that federal estate taxes begin on estates valued at $5,120,000.
Fortunately, there are a number of estate planning tools available that can be utilized to reduce, and possibly eliminate, the federal estate tax.
2012 Federal Estate Tax Exclusion Amount
$5,120,000 Million Exemption Per Person
35% Federal Estate Tax Maximum Rate
2012 Annual Gift Tax Exclusion
$26,000 Husband and Wife
Annual gift tax exclusion - You may give as much as $13,000 per year to any number of individuals without incurring federal gift tax and without having to file a gift tax return. If your spouse consents to the gift, you can give up to $26,000 to each individual, without incurring federal gift tax, but a gift tax return must be filed.
2012 Nongrantor Trust and Estate Income Tax Rates
|Taxable Income||Base Amount of Tax||Rate on Excess|
|$ 0 but not over $2,400||0||15%|
|$2,400 - $5,600||$360.00||25%|
|$5,600 - $8,500||$1,160.00||28%|
|$8,500 - $11,650||$1,972.00||33%|
This information is provided as a guide only. It is not intended to constitute tax or legal advice. This chart represents State Farm's understanding of the tax laws in effect on the printing date. You should contact your qualified tax advisor for specific advice.
Neither State Farm® nor its agents provide tax or legal advice.
State Farm Life Insurance Company
(Not Licensed in New York or Wisconsin)
State Farm Life and Accident Assurance Company
(Licensed in New York and Wisconsin)
Home Office, Bloomington, Illinois
IL - 28.6