Tax Planning
Every transfer of assets following a person’s death is subject to estate tax. A core goal of effective estate planning is to ensure your assets pass to your loved ones, not to taxes.
What Are Gift and Estate Taxes?
The federal estate tax is set by Congress and enforced by the IRS. In addition to the federal estate tax, 12 states and the District of Columbia impose a state estate tax. Whether federal or state estate tax is due depends on several factors, including marital status, the size of a person’s estate and how much gifting a person has done during their lifetime.
Federal gift and estate taxes are subject to a lifetime exclusion amount, which changes every year. Every dollar gifted or transferred in excess of the exclusion amount is subject to tax. Because of the constant changes in the lifetime exclusion amount, it is important to consult with an attorney to ensure you can reduce your tax liability.
Who Will Be Affected by Gift and Estate Taxes?
Individuals who own a business, own properties or who have accumulated high value assets in retirement plans or investment accounts should consider taking active steps to reduce their estate tax liability. If you are concerned about estate tax liability, the estate planning team at Parsons Behle & Latimer can help. Our familiarity with tax law and advanced planning ensures your money will go where it should – to your loved ones.
How to Reduce Tax Liability
There are three broad strategies to reduce gift and estate tax liability: Squeezing assets to reduce their tax liability; freezing assets with a high likelihood of growth; or extinguishing assets during your lifetime so avoid taxation at death. The estate planning team at Parsons Behle & Latimer can help you identify which (if any) of these strategies should be utilized to help reduce your tax liability.
Ready to discuss your estate planning needs?
For general inquiries, or if you don’t have a preference of which attorney you’d like to meet with, use the form below.
