ESTATE TAX PLANNING
You work your entire life to save and have enough money to comfortably retire—and ideally leave something for your loved ones when you pass away. During your life, you pay all kinds of taxes: income taxes, property taxes, sales taxes, and so on. And at the end, the government even wants to tax you on the assets you have left at your death.
This is known as the estate tax, sometimes called the inheritance tax or death tax. The best way to protect your assets and your family’s future from excessive taxation is to hire an attorney who specializes in estate tax planning. Jill Gregory is an experienced estate tax planning lawyer and can help you reduce—if not entirely avoid—the federal estate tax burden.
How Does the Estate Tax Work?
The estate tax is totally separate from federal income taxes and is paid on the net value of all your assets owned at your death. However, there are fairly sizable exemptions to the estate tax, so it’s primarily high net-worth individuals and their families who are affected.
That said, the estate tax rate is a whopping 40%, so we’re talking about potentially massive sums of money being owed by one’s heirs. And that bill must be paid to the IRS within 9 months of the decedent’s death.
Exemptions to the Estate Tax
Notably, the Tax Cuts and Jobs Act of 2017 nearly doubled the allowable exemptions to the estate tax, ensuring that even fewer families would be affected:
- Estate tax exemption for individuals expanded from $5.4 million to $11.2 million.
- Estate tax exemption for married couples expanded from $10.9 million to $22.4 million.
The exemption may increase slightly from year to year because it is regularly adjusted for inflation. The exemptions for 2022 are:
- Estate tax exemption for individuals is $12,060,000.
- Estate tax exemption for married couples is $24,120,000.
But the Tax Cuts and Jobs Act of 2017 is not forever. It is slated to expire after 2025, so it is entirely possible that the exemption amount will plummet to its old levels at that time of $5 million for individuals, as it was in 2016 (though it will be indexed for inflation, resulting in an exemption amount of roughly $6.6 million in 2026).
For those who are affected, there are numerous estate planning strategies available that can greatly reduce the amount owed. Here at Jill Gregory Law, we can advise you on the best options for your family.
Advanced Estate Planning Strategies
Families with high-value estates face several complex legal and tax issues—and the estate tax is only one of them. We offer a number of advanced estate planning strategies that are primarily aimed at reducing a family’s tax burden. In addition to the estate tax, we also help families navigate the gift tax and generation-skipping tax to pass assets on for successive generations without risk of estate tax decimating the estate at each generation.
Some of our most popular advanced estate planning tools and strategies include:
- Life insurance trusts
- Qualified personal residence trusts
- Grantor retained annuity trusts
- Asset protection trusts
- Land trusts
- Dynasty Trusts
- Family limited partnerships or limited liability companies
- Asset gifting
Estate Tax Planning Lawyer
You worked hard to build you family’s wealth and legacy, so it makes sense to put similar effort into protecting those assets—and that includes protecting them against excessive taxes. Contact Jill Gregory Law, an estate tax planning law firm to minimize the potential tax burden faced by your family, so you can maximize the inheritance you pass to them.