Estate Tax PlanningProtecting Your Family & Legacy
In our experience, people tend to think that federal estate taxes only apply when a person passes away. However, the reality is that estate taxes can’t really be considered an inheritance or a death tax. This is because the tax only applies to the transfer since it is being levied on assets that are passed on to other people. There are various components of gift taxes, estate taxes, and generation-skipping transfer taxes that require in-depth knowledge of the restrictions and enforcements, and our dedicated legal team in Rockford has the extensive resources you need to minimize or avoid some of these taxes.
To discuss the ways that Estate Law Partners, LLC can protect your estate and more, please give us a call at (608) 292-5185 today to request a consultation.
What Is a Unified Exemption?
In 2017, changes to the Tax Relief, Unemployment Insurance Authorization, and Job Creation Act (TCJA) made it so individuals could receive distinct federal exemptions, depending on the value of the estate. Past these initial tax rates, 40% would still be exempted.
A unified exemption works by combining the gift tax and the federal estate tax. Under this arrangement, the exemption for federal estate taxes occurs at the moment of death and ends up being reduced in correlation with the person’s lifetime gift taxes.
Spouses can decide if they want their lifetime gift exclusions to be separate if they are making a tax, or they can choose to conjoin their exemptions together. Fortunately, any gifts that are presented in the normal allotted gift exclusion amounts per annum will not place any restrictions or decrease the individual’s unified exemptions for lifetime gift and estate taxes.
Tax Planning Strategies
- Annual Gifting: Individuals can transfer money or assets to family members and loved ones to reduce the total value of their estates. This lowers the amount of estate taxes will be due after the person passes away. Making these types of gifts annually can allow assets to be transferred to beneficiaries without incurring gift and estate taxes.
- Keeping Assets in Trust: Various types of trusts can be used to protect assets and reduce the size of a taxable estate to avoid gift taxes that can apply when assets are transferred to beneficiaries. Contact us today to determine if your estate plan should include grantor retained annuity trusts (GRATs), irrevocable life insurance trusts (ILITs), education trusts, or special needs trusts.
- Charitable Giving: People can also take income tax deductions for money or assets they donate to charity. Other types of charitable donations, such as charitable remainder trusts, charitable lead trusts, or family foundations, can also be used to avoid capital gains and estate taxes.
Schedule a Consultation with Our Legal Team in Rockford
At Estate Law Partners, LLC, we are committed to serving clients of all backgrounds who need help with complicated estate planning matters. Our legal professionals understand the importance of planning for the future, which is why we are here to use our extensive knowledge of the law to devise legal strategies that are tailored to our clients' unique needs.
Call (608) 292-5185 or contact us online to schedule a free case consultation with an estate tax planning lawyer at our firm.
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