Minimize estate tax and maximize the assets you pass on
The decisions you make about your assets today will affect how they are taxed and distributed in the future to your beneficiaries.
You have worked hard and paid taxes all your life but nobody should be paying taxes on what you have spent your life building.
Unless you plan ahead, the value of your assets could be at risk with estate tax (sometimes also called inheritance tax or death tax).
We help you:
- Understand the applicable estate taxes
- Minimize the tax paid on your assets
- Understand why you need to plan for asset protection
Who has to pay the estate tax?
Estate tax is paid on the net value of all the assets you own at the time you pass away.
It amounts to 40 percent of the value of your estate and must be paid by your family or other beneficiaries within nine months of you passing away.
Currently, estate tax largely affects high net-worth individuals with an estate exceeding $11.4 million ($22.8 million for a married couple) but the regulations do change from year to year and from administration to administration.
Just because you are not affected by estate tax now doesn’t mean you won’t be in ten years’ time.
The following exemption changes were introduced in 2017:
- For individuals: estate tax exemption increased from $5.4 million to $11.2 million.
- For married couples: the estate tax exemption increased from $10.9 million to $22.4 million.
- Annual Adjustment: each year the estate tax exemption is adjusted for inflation so the exemption has increased from $11.2 million in 2017 to $11.4 million in 2019 ($22.8 million for a married couple).
Clearly, 40 percent amounts is a significant tax bill.
For those with a net worth that exceeds $11.4 million, it is beneficial to understand the steps needed to reduce your tax burden.
How to minimize estate tax
How do you reduce the tax burden of your family, if you are an individual with an estate currently valued at $11.4 million or over?
One of the most widely known ways to minimize estate tax is by gifting assets. We can advise on this.
However, there are other strategies that we advise on. Depending on your circumstances, we can consider the following:
- Setting up asset protection trusts
- Creating life insurance trusts
- Forming family limited partnerships or limited liability companies (LLCs)
- Using qualified personal residence trusts
- Selling assets to an irrevocable trust created for you by a third party
- Utilizing dynasty trusts
Start preserving your assets
As well as minimizing estate tax in the future, there is another concern for many individuals: preserving your assets now.
As an estate planning firm, we will ensure that both your asset preservation and estate tax planning concerns are accounted for.
It is important to take measures to protect your assets before a larger percentage is lost through unnecessary tax payments or long-term care.
A few simple asset preservation planning measures can make a big difference.
We will look at the following areas of your assets and advise on the steps you can take to protect them, based on your circumstances:
- The gross value of your estate
- Life insurance
- IRA and 401K accounts
- Jointly owned assets with a spouse
- The present situation with your will(s)
Together, we will consider the risks and how best to counter them, using strategies such as revocable trust setups. We also work with your financial adviser to explore asset preservation options such as wealth replacement strategies using life insurance and other vehicles.
Attending to this while you are alive and well could save your family from paying the price.
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As seen and heard on
Just a few minutes into our first meeting we had a high level of confidence that we had landed in the right place and knew we were in good hands. The entire experience – from the first meeting through the delivery of the final documents – was not only painless, but it was also pleasant!
We had known for many years that we needed an estate plan but just never got around to doing it. We immediately felt like they “got” our unique family situation and knew just what to do. We wish we had done this sooner but what a great feeling it is to know that what we worked so hard for all these years will be protected and go to the right people when it’s our time.
We felt like they really listened to us as we talked about our family and business and what we wanted to accomplish. They took the time to help us understand how living trusts and LLC’s work and how they can help protect our family and property. The fixed fee approach was very appealing to us. We were excited when we received our estate planning and LLC notebooks!
For years my husband and I thought about creating a living trust but had assumed the process would be confusing, expensive and time-consuming. We could not have been more wrong. We attended two online Zoom meetings where they explained what a trust is, why it’s important to create one and how to go about doing so. They were able to gather the information needed to create our trust from just these two online meetings plus the final in-person meeting to sign documents.
Kent is an exemplary advocate for his clients. It is an honor to have worked with him and witness his high ethical standards.
We put together a complete estate plan in just three one-hour meetings. The meetings were well organized and planned by the attorney. The concepts and legal terms were all well explained by giving real-world examples. The staff is easy to work with. They went out of their way to make it an enjoyable experience.