• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sexton, Bailey Attorneys, PA

SEXTON BAILEY ATTORNEYS, PA an Arkansas Estate Planning & Trust Information Center

Sexton, Bailey Attorneys, PANorthwest Arkansas Estate Planning Attorneys(479) 443-0062

Client Vault
  • Home
  • Our Firm
    • Our Firm
    • About the American Academy
    • Advantages of Working With Our Firm
    • Attorney and Staff Profiles
    • News & Events
    • Our Reviews
    • Speaker Connection
  • Estate Planning
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • Legacy Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
  • Webinars
  • Practice Areas
  • Resources
    • DocuBank
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Articles
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • FREQUENTLY ASKED QUESTIONS
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • Legacy Wealth Planning
      • Medicaid Planning
      • Pet Planning
      • Trust Administration & Probate
    • Newsletters
    • Trust Administration & Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Contact Us
  • Blog
Home / Estate Planning / The New Federal Estate Tax Law: Double Coupon Day

The New Federal Estate Tax Law: Double Coupon Day

March 11, 2011 by Audra Bailey Wilcox Leave a Comment

The new federal estate tax law has “double coupon day” and, if you’re like most people, double coupon day gets your attention.  Every individual has a large coupon worth $5,000,000.  Married couples have a double coupon worth $10,000,000; hence:  The new federal estate tax law’s “double coupon day.”

Here’s how it works

The transfer of your assets to your beneficiaries is a taxable event.  It’s like standing in the checkout line at the IRS store.  You put all of your assets on the conveyer belt and the IRS sales clerk rings them up.  She says, “You have $2,500,000 worth of assets and you owe tax on them.” 

You smile and reply happily, “Okay.  I’ll use my coupon to pay the federal estate tax.  Thank you very much.”  Your assets are transferred to your beneficiaries and no out of pocket dollars have been used to pay for the federal estate tax.

Double coupon day

A married couple enjoys double coupon day.  So, in the above scenario, only $2,500,000 of the $10,000,000 coupon for married couples has been used.  So, when your spouse dies, he or she can place another $7,500,000 worth of assets on the IRS conveyer belt and pay for the taxes with the remaining coupon.

The catch

If it sounds too good to be true, it is, unless you and your spouse both die in 2011 or 2012.  In 2013, your coupon is drastically reduced to $1,000,000 per individual.  So, at the IRS checkout counter, you can only pay the taxes on $1,000,000 worth of assets with your coupon.

What’s taxed

The federal estate tax is a tax on everything you own:  retirement accounts, home, business, life insurance, investment accounts, bank accounts, other investments, and personal property. 

The result

And while most people will not be affected by the tax in 2011 and 2012 because of the large coupon, many people will be affected in 2013 and beyond when the coupon is reduced to $1,000,000.

If you have questions about the federal estate tax or about avoiding the federal estate tax with advanced planning, consult with a qualified estate planning attorney.

  • Author
  • Recent Posts
Audra Bailey Wilcox
Audra Bailey Wilcox
Attorney at Sexton, Bailey Attorneys, PA
Audra Bailey Wilcox
Latest posts by Audra Bailey Wilcox (see all)
  • Bill Nye the Science Guy on Wearing Masks in Public - July 11, 2020
  • Low-Interest Loans: An Estate Planning Technique - June 23, 2020
  • Irrevocable Medicaid Trusts - June 16, 2020

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Sexton, Bailey Attorneys, PA

Is Your Plan Outdated?

Subscribe to Our Blog

Office Address

Fayetteville
2766 Millenium Drive
Fayetteville, AR 72703
Phone: (479) 443-0062

Office Address

Prairie Grove
1100 Division Street, Suite 4
Prairie Grove, AR 72753
Phone: (479) 846-6026

Office Address

Farmington
6 West Main
Farmington, AR 72730
Phone: (479) 267-4441

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 12:00 PM

Map

map for office
  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

footer-logo

© 2021 American Academy of Estate Planning Attorneys, Inc.