You may have heard the old saying, “Only two things are guaranteed in life; death and taxes.” It's a pretty safe bet that these two realities rank pretty far down the list of your favorite things to think about, but think about them you must, especially when considering your estate plan. Everyone will face taxes, and everyone will face death, but some folks will even face a tax on their estate after their death. Do you need to plan for this tax?
Odds are, you probably don't. Luckily, here in Georgia we do not have a state estate tax. However, we must still consider the federal estate tax. In 2022, the individual estate tax exemption increased to $12.06 million per person. This means that if your estate is less than $12.06 million, you do not have to worry about a federal tax on your estate after your death impacting your loved ones. For married couples utilizing portability, the exemption amount doubles, meaning a couple could shield up to $24.12 million from the federal estate tax (in 2022).
For the vast majority of people, their estates are worth far less than $12 million so they do not have to worry about an estate tax in their estate planning. According to the IRS, in 2019, only 6,409 estate tax returns were filed, with only 2,570 of them actually being taxable estates. Keep in mind, the United States has a population of over 329 million, with around 2.6 million people dying each year. That translates to less than 1% of US adults who die each year having estates owing a federal estate tax.
However, just because your estate is not taxable does not mean that you can neglect your planning. Unfortunately, some folks are under the impression that estate planning is just for the wealthy and they will be just fine without a Will or Trust. What they often don't understand is that not completing your planning means that you forfeit your right to decide how your estate is distributed and instead those important decisions are left to the state. If you die without a Will or Trust, Georgia's laws of intestate succession will determine how your assets are distributed, and odds are good you may not like it. No matter your wealth or tax status, there are important decisions to make and plans to have documented to ensure your wishes are known and your family are protected in the event of your incapacitation or death.
If you want more information on estate planning in Georgia, click here to request our free guide, no strings attached. Wherever you are in Georgia, if you have questions or need to consult with an experienced estate planner, give us a call at (678) 344-5342. We work with families and individuals across the state, and it would be our honor to assist you.