Estate taxes may be one of the most confusing issues known to mankind because the amount of estate taxes you may have to pay can change from year to year.
Federal Estate Taxes
Currently, Federal estate taxes are applicable only to gross estates above the 5.12 million dollar exclusion, with a top estate tax rate of 40%. The exemption amount will adjust with inflation. There is also a “portability” feature, which enables the deceased spouse’s unused lifetime exclusion to be transferred to a surviving spouse. Essentially, this allows a married couple to exempt up to $10,240,000 in assets from the estate tax.
How to Minimize Federal Estate Taxes
The most important thing you can do is assemble a team of professionals to assist in developing an estate plan that can help minimize Federal estate taxes for you and your family. This team should include a qualified estate planning attorney, certified public accountant and your financial advisor.
Arrange for your estate planning team to all be in the same place so everyone is on the same page and can create a plan that’s right for your individual situation. There are many estate planning and financial tools available to minimize estate taxes, but not all of them are going to be right for you.
You should arrange to meet with your estate planning team after the initial plan is in place if your life situation changes, such as in the form of a marriage, divorce, death, remarriage, separation, birth of a child or job change.
Even if you feel you don’t have any major life changes for a particular year, it’s still a good idea to get your team together to review any changes or modifications that may have to be made due to changing estate tax laws or other factors.
The attorneys of Godbey & Associates can help you and your family optimize your estate tax position through strategic estate planning. Contact us to talk to an experienced probate and estate lawyer who can evaluate your situation and help make important choices about your future.