How extensive do your assets have to be before you are considered to be “rich?” Perhaps it depends on which politician you’re talking to. This is a question that really does not have a single answer because different people will respond with different numbers. The reason why we are raising the topic here today is because of the fact that many people are under the impression that the estate tax is only applicable to people who are wealthy.
It should first be mentioned that by any fair barometer having achieved moderate financial success during your lifetime should not be viewed as a negative that earns you a penalty. But if you are unconcerned about the estate tax because you don’t consider yourself to be truly rich you may want to pay closer attention to the details.
The dividing line between those who are subject to the estate tax and those who are not is the estate tax exclusion. At the present time it stands at $5 million, and the reality is that a very small percentage of estates are valued at more than this amount. However, you must recognize the fact that current estate tax parameters are scheduled to expire at the end of 2012. If they do so without any new legislation being enacted that affects the estate tax the exclusion will be reduced to just $1 million.
According to CNNMoney there were some 8.4 million households in America in 2010 that had a net worth in excess of $1 million. When you consider the value of your real property and its appreciation over several decades, your individual retirement accounts, savings and investments, life insurance and any inheritances you and your spouse may have received over the years, you can see how it would be quite possible for an “ordinary” couple to amass over a million dollars in total assets.
The suggestion here is to inventory your assets carefully, keep a close eye on the estate tax exclusion as it changes, and keep in touch with your estate planning attorney on an ongoing basis. And, don’t forget the life insurance factor!
Larry Parman
Founding Attorney
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
- Choosing the Right Successor Trustee: Key Considerations - October 8, 2026
- Aging in Place: A Medicaid Waiver Can Fill the Gap - October 6, 2026
- Does Every Estate Go Through Probate? - September 29, 2026
