The after-midnight deal that ran into 2013 and temporarily rescued Americans from the so-called fiscal cliff included information about how inheritance tax, or estate tax, will be handled at the federal level. Before then, there was only speculation about what might happen. If Congress had done nothing, the exclusion before inheritance tax kicked in would have reverted to one million dollars per person.
Instead, it's locked in at $5 million per person or $10 million per couple. If you do have to pay, meaning you inherit an estate exceeding the $5 million or $10 million limit, the rate is now 40% instead of 35%.
Many people sighed relief when Congress elected to keep the higher exclusions. That means fewer people are above the level of needing to pay tax.
Regardless, succession planning is still a good idea. With farmland values rising, it's still possible for a farmer to have an estate above the cap.
More concrete information about estate planning is a perfect backdrop for the series of Succession Planning Workshops being carried out by Purdue University Extension through late January, February and March. One session has already been held in Kosciusko County. There are still nine more two-week sessions that you can choose to attend.
Each program consists of two, one-day programs. Topics include facing the idea of doing succession planning and working through relationship building, as well as the nuts and bolts of estate planning and exclusion limitations.
Each of the two-week series sessions runs four hours. Week two will specifically include discussion of the pros and cons of pre-nuptial agreements.
Areas with meetings still remaining include: Allen County, Blackford and Jay; Greene County; Hendricks County; Vigo County; White County; Howard, Carroll and Cass; and programs in southwest and southeast Indiana.
Contact your county Extension educator for details. Families are encouraged to attend together. There is a registration fee.