Estate planning for married couples

Editor's note: Read more columns by local investment advisers in today's "Your Money" special section.

As of Jan. 1, 2006, the law permits each American to transfer $2 million to heirs, tax-free.

This is not because the I.R.S. has eliminated federal estate taxes. On the contrary, the estate tax is alive and well. The reason we pay no dollars in tax on $2 million is because each citizen possesses a transfer tax credit of $780,000. This figure just happens to equal the federal tax on an estate of $2 million.

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