There may be a mistaken impression that, at death, your assets will automatically be distributed to your loved ones. Instead, several “unwanted heirs” may step forward FIRST for their share of your estate.
These “unwanted heirs” can include:
- Federal Estate Tax
- State Inheritance Tax
- Estate Administrative Costs (funeral expenses, probate costs, professional fees, final expenses and debts)
The problem is that these “unwanted heirs” can siphon off a significant portion of an estate’s total value.
The high cost of dying:
| Gross Estate | Administrative Costs at 5% (1) | Taxable Estate | 2012 Federal Estate Tax (2) |
| $1,000,000 | $50,000 | $950,000 | $0 |
| $5,000,000 | $250,000 | $4,750,000 | $0 |
| $7,500,000 | $375,000 | $7,125,000 | $701,750 |
| $10,000,000 | $500,000 | $9,500,000 | $1,533,000 |
| $15,000,000 | $750,000 | $14,250,000 | $3,195,500 |
| $20,000,000 | $1,000,000 | $19,000,000 | $4,858,000 |
| $25,000,000 | $1,250,000 | $23,750,000 | $6,520,500 |
| $30,000,000 | $1,500,000 | $28,500,000 | $8,183,000 |
(1) Actual costs may be higher or lower.
(2) Based on the 2012 maximum 35% estate tax rate and $5,120,000 exemption equivalent.
(2) Based on the 2012 maximum 35% estate tax rate and $5,120,000 exemption equivalent.
What might the “high cost of dying” mean to you and your family?
To view the entire NFS October ’12 Estate Ideas, click here.
