You’ll always have to pay taxes – and in some cases, you’ll even have to pay taxes after your death. Your estate may be subject to estate tax, and while estate taxes only affect a lucky few, it’s important to understand how you can avoid or minimize your tax burden, and the tax burden that your beneficiaries will have to deal with after you’ve passed away.
As an elder law lawyer can explain, estate taxes are oftentimes referred to as “death taxes”, and for good reason: Many people view these taxes as one final kick in the pants from the government before they’re buried. Fortunately, there are some methods you can use to determine whether your family will have to owe estate taxes. Read on to learn more about estate taxes, who they affect, and what you can do to protect your family’s future.
About Estate Taxes
There are a few different types of estate taxes: Federal, state, and inheritance. Like other tax issues, the amount you (or your beneficiaries) will pay depends on the state. In some states, the estate tax eats up to 40% of the value of your estate – and it’s important to remember that your estate’s value is determined by the current value of your assets, not the price of your assets when you originally bought them.
Fortunately, there’s one major barrier that protects people from having to pay estate taxes: Estate taxes only affect you if your estate is worth over $11.70 million. If your estate is valued at even one cent below that magic number, you’re off the hook. Additionally, estate taxes only apply in 17 states, and the District of Columbia.
If you’re in one of those seventeen states and your estate is worth more than $11.70 million, don’t worry: There’s a growing public sentiment against these taxes and politicians are working to get rid of them. Plus, there are many techniques the wealthy use to avoid paying estate taxes.
Some Proven Techniques
When it comes to reducing your estate tax burden, the most valid technique involves reducing the value of your estate to below that $11.70 million thresholds. This can be done in a number of ways, the simplest of which is to just give away your assets while you’re still alive. You can also use the money to invest in businesses that are run by your heirs or open up a charity or foundation.
There are many ways to avoid estate taxes, but you can’t learn how to navigate the complicated world of estate taxes without taking steps to plan your estate in the first place. Estate planning is the first step to understanding how much you might owe on estate taxes (if you’ll owe any at all) and understanding how you can protect your beneficiaries from excess taxation after your death.
Contact an Elder Law Lawyer Today
An elder law lawyer is an attorney who specializes in estate, estate management, and tax preparation. They are a valuable resource that can keep you in the loop about how much you might owe, and how you can avoid owing in estate taxes. As an added bonus, they can also help you establish wills or trusts. Getting in touch with an elder law lawyer is your first step to protecting your beneficiaries and your legacy – reach out to an elder law lawyer at McCarthy Law, LLC for all of your needs today.