Estate Tax Planning
Estate Tax Planning Attorneys in Brooklyn
Safeguarding your estate from excessive taxation is one of the most important things you can do for your future. Leading Brooklyn law firm Michael F. Kanzer & Associates, P.C. understands the need for a comprehensive estate tax plan to protect beneficiaries from losing hundreds, thousands, or even millions of dollars to the government due to hefty taxes. By drafting an estate plan with an experienced attorney, you could ensure that your property and other financial assets remain guarded from burdensome governmental taxes.
Federal Estate Tax Exemptions & Rates
Typically, the best way to minimize estate taxes is to gift away certain assets during your lifetime. However, in order to participate in charitable giving, you must be aware of the updated federal estate laws that took effect in 2013 under the Taxpayer Relief Act. Under the new estate tax laws, individuals are able to transfer or gift up to $5.34 million in assets without being taxed by the federal government. Individuals can gift up to $14,000 to any person each year without being taxed. If the amount exceeds the $14,000, a return must be filed.
Federal Estate Tax: Married Couples
Married couples not only have the benefits of individual estate tax exemptions, they also enjoy unlimited deductions when transferring assets to one another. Though leaving your estate to your surviving spouse may seem like common sense, it does not mean that you should not plan for other circumstances. Without proper planning, you could end up losing some exemptions after one spouse passes. For instance, a husband could leave his wife $3 million in individual assets with no tax consequences. Even though the wife may already have $5.34 million in individual assets, the husband’s money still won’t be taxed because married couples have the benefit of unlimited deduction. However, if the wife does not gift away the husband’s portion of the assets before she passes away, and it remains unutilized, her children will most likely have to pay estate taxes on that portion.
Portability: How Can It Help You?
In order to counteract these exemptions on unutilized assets, married couples can take advantage of estate tax portability. Portability allows the surviving spouse to use the deceased spouse’s unutilized tax exemptions. Unfortunately, portability does not happen automatically, so it’s important for couples to discuss filing an estate tax return with the IRS at least 9 months before the first spouse dies.
As an alternative to portability, couples may also use credit shelter trusts. When established by an experienced Brooklyn estate tax law professional, credit shelter trusts act similarly to portability.
High Net Worth Estate Planning
For individuals and couples with an extremely high net worth of assets, there are a few options to help them thwart burdensome estate taxes. They are as follows:
- Strategic Gifting
- Credit shelter trusts
- Life insurance trusts
- Personal residence trusts
- Grantor retained annuity trusts
Discuss your situation with one of our seasoned associates today. We can help draft you up a plan that will help shield your assets from excessive taxation and save your beneficiaries a great deal of financial grief. With Michael F. Kanzer & Associates, you can rest assured that the future of your estate is in good hands. Contact our Brooklyn law firm at 718- 769-7200 to learn more about your options or schedule an appointment.