You may feel comfortable with the financial protection that you intend to leave your loved ones when you, unfortunately, pass on. But you must not forget about the impact federal and state taxes may have on your assets. Read on to discover how you can reduce estate taxes and how a seasoned Broward County estate tax planning lawyer at The Probate Lawyers can assist you with this strategy.
In what ways is it possible to reduce estate taxes?
First of all, the federal estate tax rate ranges from anywhere between 18 percent to 40 percent and is dependent on the size of your taxable estate. But luckily, as a Florida resident, you do not have to worry about paying any state taxes on your estate.
This is not to say that you should not attempt to reduce your federal estate taxes as much as possible. Examples of how this may be possible are as follows:
- You may opt for a marital transfer estate tax exemption, meaning you may transfer your assets to your surviving spouse.
- You may transfer your separate assets and share of community property to an AB trust or QTIP trust, meaning you may transfer your assets to your surviving spouse.
- You may transfer funds into a life insurance trust, meaning it is tax-deductible in that tax year before your beneficiaries inherit its proceeds.
- You may set up a family limited partnership, meaning you may minimize income tax and limit liability for your family partners.
- You may make annual, tax-free gifts to your children and grandchildren, meaning you may gift up to $16,000 a year without incurring a gift tax.
- You may gift money or transfer real property to your loved ones who are minors, meaning you may give up to $16,000 a year until they reach the age of 21.
- You may set up private annuity payments with your younger loved one, meaning the asset is no longer part of your estate and your estate is reduced.
How can a lawyer assist in my estate tax planning?
A common misconception is that estate taxes may only significantly impact ultra-wealthy individuals. On the contrary, you must account for these taxes regardless of the net worth of your estate. This is because these taxes may still minimize the assets your beneficiaries may receive, the donations your supported charities may receive, and more. With all that being said, the lawyers from our firm will ensure that you and your loved ones are getting the most out of your estate.
If estate planning is something that you wish to kickstart today, then retain the services of a competent Broward County estate lawyer from The Probate Lawyers. We await sitting down with you at your free initial consultation.
