Newsletter, Winter 2009

Estate & Gift Tax Update for 2009

Federal Estate Tax Exemption Increases. For those dying in the year 2009, the amount of assets which are exempt from the federal estate tax is $3,500,000. In 2010, the federal estate tax is scheduled to be completely eliminated, but most observers expect Congress to change that during this year. President Obama has stated that he prefers keeping the federal estate tax with a $3,500,000 exemption, as it is now.

The "lifetime" exemption from the federal gift tax remains at $1,000,000.

Estate & Gift Tax Rates Remain the Same. The top federal estate tax rate is 45% in 2009, as it has been in 2007 and 2008. The top federal gift tax rate will be equal to the highest income tax rate, which is now 35%.

Annual Gift Tax Exclusion Increases. The annual gift tax exclusion, which for many years was limited to $10,000 for each donor per donee, is now indexed to inflation, and as a result as of January 1, 2009 the exclusion increased to $13,000 per year, up from $12,000 in 2008.

It's Now Easier to Avoid Probate in Utah. In Utah, personal property owned by a decedent can be collected by the successor of the decedent by presenting an Affidavit to the holder of the property if the total personal property otherwise subject to probate is less than a specified amount. In the past, that amount was $25,000, but that has been increased. At present, up to $100,000 of such assets can be collected without having to go through probate.

Utah's New Living Will. Utah's current Living Will became effective on January 1, 2008.  The new Living Will is officially known as an Advance Health Care Directive. The new Advance Health Care Directive document allows you to make a number of choices all in one single document.

First of all, it provides for the appointment of an agent to make health care decisions for you if you are unable to make decisions or speak for yourself. If you choose, you also could nominate that agent to be your guardian, and give the agent the right to make decisions concerning organ donation and medical research.

Next, it allows you to record your wishes concerning your health care. This part is what is commonly referred to as a "Living Will". The new Advance Health Care Directive allows you to make specific choices concerning when medical care is to be withdrawn or withheld.

Finally, the Directive only requires one disinterested witness. Neither multiple witnesses nor a Notary Public need be present at its execution.

Here is a copy of the Advance Health Care Directive form.