What is death tax planning?
The federal government levies a tax on the transfer of wealth (not resulting from a sale; in other words, a gift) if the amount transferred exceeds certain limits. The tax on this transfer of wealth is based upon the value of the property when it is transferred. If the transfer is made during a person’s lifetime, the tax is a gift tax. If the transfer is made upon a person’s death, the tax is an estate tax. The tax is levied on the transferor and the transferee takes the property without being liable for the tax. On June 7, 2001, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 into law.
