When you are planning out your estate, you are probably thinking about which of your assets and belongings you want to leave behind for your loved ones. What you may not be thinking about is the estate tax. This is the tax that has to be paid on assets that you have left to your beneficiaries once you have passed away. No family wants to be stuck with a huge tax bill when their loved one has passed away, but a lawyer can help you with that. A Rockland County wills, trusts & estates attorney from our firm can find legal ways to lower your potential burden and how much estate tax would need to be paid.
What is the Estate Tax?
The estate tax is a tax levied on money or assets that you inherit. Most beneficiaries do not have to deal with this tax because there is a high threshold to meet before it kicks in. However, it is still wise to go over your estate plan and do everything that can legally reduce this potential burden on your loved one.
There is a federal estate tax, but the exemption is for around $12,000,000. That means that you do not have to worry about paying taxes on assets worth less than that. New York also has its own estate tax. This exemption is lower, at $6.58 million. So that means that you could owe estate taxes to New York even if there were not enough assets passed down to trigger a federal estate tax.
What Are Some Popular Ways to Lower an Estate Tax Burden?
There are some ways to reduce a potential estate tax burden. We would suggest making plans to:
Give gifts: You can give a loved one, like a child or grandchild, a gift of up to $16,000 each year without having to worry about a gift tax. Your spouse can also give that much. So that is $32,000 per year, per person that can be given away and not subject to any estate taxes.
Form trusts: Certain trusts can help protect your assets and reduce tax burdens. Which works best for you can depend on a number of factors, so talk things through with our lawyers and we will help you find an effective solution.
Donate to charity: Charitable giving can also lower the value of your estate and your tax burden. A lawyer can help you set up a trust that will allow you to support causes you care about with the money that you have worked hard for your entire life.
Contact Our Law Firm
If you are ready to plan out your estate and ensure that your assets are mostly left to your loved ones instead of the government, we are ready to help you. Contact the Lauterbach Law Firm and schedule an appointment. Tell us a bit about your estate planning needs and what you want to leave for your family, and we will help you draft a comprehensive plan.