The Cash Flow Clock: For Retirees - Book - Page 36
The Cash Flow Clock
Estate Tax
We have discussed the three primary tax buckets but there is another tax that
must be considered – the Estate Tax. This is a tax of up to 40% on the assets
in our estate. The good news is that not many will be affected by this tax, at
least based on current law. As of 2024, the exemption for the estate tax is
$13.61 million per spouse. Only assets exceeding this amount will be
subject to the tax. However, when the current tax cuts expire at the end of
2025, this exemption is expected to be cut in half. In the past several
decades, it has been much, much lower than it currently is. It was only $1
million as recently as 2003. It is important to keep an eye on the estate tax
and understand how it might affect us.
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