You may have dedicatedly paid taxes throughout your lifetime. But you must also keep in mind that your assets may incur additional taxes upon your unfortunate passing; before they are inherited by your desired beneficiaries. Therefore, it takes careful consideration when arranging your estate plan to reduce the amount your loved ones will be taxed. Read on to discover what estate planning strategies you may adopt to reduce your estate taxes and how a seasoned Broward County estate tax planning lawyer at The Probate Lawyer can help with this process.
Will my estate be taxed in the state of Florida?
The state of Florida is popularly known for not placing state taxes on its residents’ estate plans. This is deemed as a great benefit, as opposed to other states that enforce state estate taxes that reach as high as 18 percent.
However, this is not to say that federal taxes are not imposed on Florida residents; though it may only apply to a select minority. This is because federal taxes do not apply to an estate plan unless it is made up of assets totaling $12.92 million or more. If one surpasses this federal exemption amount, then their estate may be taxed anywhere from 18 percent to 40 percent.
What are estate planning strategies that can reduce estate taxes?
If you are a Florida resident who may potentially face federal estate taxes, you must strategize your estate plan in a way that legally avoids them. In other words, you must implement certain estate planning documents that reduce the amount of assets considered a part of your estate. A few examples are as follows:
- You may implement an irrevocable tax trust: this way, you may relinquish your ownership rights over the given assets. This responsibility is given to a reliable trustee who may distribute these given assets to your designated beneficiaries when the time comes. All the while, the amount of assets considered to be part of your estate is reduced.
- You may implement lifetime charitable transfers: this way, you may make donations directly to your favorite nonprofit or other qualified charitable organization. This also comes with an income tax reduction throughout your lifetime. All the while, the value of your estate is lessened.
- You may implement a private annuity: this way, you may sell your assets to your desired beneficiary in exchange for their promise to pay you back in annual amounts. These payments become part of your estate, which you may work to distribute later on. However, the asset itself is not, thereby lowering the value of your estate.
In conclusion, please consider contacting a competent Broward County estate lawyer for all your estate planning needs. Our team at The Probate Lawyers is ready and willing to assist you.
