In The News:

Wisconsin and Federal Estate Tax Update

As of January 1, 2008, Wisconsin has no estate tax.  This change benefits taxpayers with estates whose gross taxable value exceeds $675,000, as those estates were subject to a Wisconsin estate tax prior to this year.  The elimination of the estate tax in Wisconsin will remain in place unless the legislature votes to reinstate the tax at some point in the future.

The federal estate tax remains in place, however.  Currently a federal estate tax credit is applied to transfers at death equal to the tax on the first $2 million of taxable property.  This means that you can transfer $2 million free of federal estate taxes at your death (for married couples, each spouse can transfer $2 million free of federal estate taxes at their death).  The federal estate tax laws are currently in a state of flux, and over the next few years there will be additional changes.  In 2009 the federal estate tax credit will increase to equal the tax on the first $3.5 million of taxable property.  In 2010 there will be no estate tax.  In 2011 the estate tax credit will revert back to equal the tax on the first $1 million of taxable property , unless Congress acts between now and the year 2011 to change the law.

In doing any estate tax planning, taxpayers should also keep in mind the relationship between the estate tax and the gift tax.  Any portion of your $1 million federal lifetime gift tax credit that is used prior to your death will reduce the amount of the federal estate tax credit available to you.  For example, if you use $500,000 of your lifetime gift tax credit in 2002 and you die in 2008, you will only be able to transfer $1.5 million free of federal estate taxes at your death. 

Please contact Charity McCarthy if you would like more information regarding the status or application of the Wisconsin or federal estate tax laws.

Go to Archived News

This page is intended to provide general information about various legal issues and developments.  It is not intended to be a complete list of all recent legal developments.  This page does not constitute legal advice and should not be relied upon in dealing with specific factual or legal matters.