Tuesday, August 11, 2009

Estate Planning Tip of the Week

    Did the federal estate tax and Vermont estate tax levels change in 2009?

    Yes. The federal estate tax exemption rose from $2 million in 2008 to $3.5 million in 2009. The exemption is the amount an individual can pass to their heirs without having to pay an estate tax. The top federal tax rate on taxable estates remained steady at 45 percent.

    In Vermont, the legislature passed a bill in June that reduced the Vermont estate tax exemption from matching the federal level (currently $3.5 million), to a $2 million level, which equals the state's pre-existing level in 2008. Thus, for decedents dying in 2009, a Vermont estate tax could be due even though a federal estate tax is not, if the decedent died with an estate valued between $2 million and $3.5 million. 

    For more information on federal and Vermont estate taxes, see 2009's Increased Estate Tax Exclusion Could Cause Problems, and Re-emergence of the Vermont Estate Tax on the Articles Page.