Estates (big and small) need to have a clear plan in place to reduce the estate tax burden. Congress has been very erratic on this issue, with no taxes for a couple of years and now an exemption for estates smaller than $5 million, with a 35 percent tax charged on bigger estates. The unified credit limit is about to be reduced to $1 million, with a 55 percent tax rate for bigger estates. There are many different ways to ensure little or no estate tax is applicable, regardless of the size of the estate.
Do you need legal representation related to estate tax? Our taxation law attorneys are ready to help! Contact a taxation lawyer in your area today for more information.
Our lawyers can help with:
The federal government offers two types of exemptions with regards to estate planning. One is the $13,000 exemption limit for annual gifts. You and your spouse can give $26,000 per year to as many individuals as you want without it being subject to gift tax. The second exemption is the unified credit explained above, which can be used only once in a lifetime.
You can set up a revocable living trust, which will hold your assets in your control, but out of your estate until you want to pass it on to your beneficiaries. Irrevocable trusts cannot be modified and you will have no control over the assets once you transfer them to the trust. However, it will avoid the estate tax and go to your beneficiaries.