Note: The current Estate Tax Law has recently
been subject to major changes. As with all of our calculators, this calculator is
correct to the best of our knowledge. Always personally visit and consult with a
qualified financial professional when making any financial decision.
Under the Tax Act of 2001, the federal estate tax is gradually phased out until its final repeal
in the year 2010. If Congress does not act at that time to repeal it for the years following, it
will automatically revert back to the rates in effect during the year 2001, with an exemption
for the first $1,000,000 of assets. This calculator assumes that Congress will fail to finalize the
repeal of the federal estate tax before 2001.
Probate Costs will vary from state to state and depend on how title is held to assets. Some
planners use a rule of thumb of 5%.
The Probate and Administration costs are calculated by multiplying the Probate Percentage
and the Future Estate amount.
After 2010, estates over $10,000,000 have a 5% surcharge until the benefit of the lower graduated
tax brackets has been recaptured.
Individual states may also impose and inheritance or estate tax which is not specifically
If death occurs during the year 2010, there will be no federal estate taxes. However,
beneficiaries of the estate will receive the same income tax basis as held by the decedent. (Subject
to an adjustment of $1,300,000 for assets passing to the heirs and an additional $3,000,000
for assets passing to the surviving spouse.) When these assets are sold by the beneficiaries, taxes
on capital gains will be determined from this carried over basis.