The 2 Best Ways To Avoid An Estate Tax
The state of Florida does not have an estate tax. And, for this reason, when someone passes away, the items within their estate will not be taxed by the state of Florida.
Even though the above is true, there is one caveat: the state of Florida doesn’t have an estate tax, but there is a Federal estate tax that must be paid.
If an estate is worth more than $13,610,000 then, as per the Federal government’s rules, that estate will be taxed up to a certain point.
Going over the two best ways to avoid paying the Federal estate tax, and speaking with a lawyer, will allow you to protect your estate from unnecessary taxes.
What Are The 3 Best Ways To Avoid An Estate Tax?
01: Give Gifts
You can give gifts to your beneficiaries, throughout the course of your life. By doing so, you can lessen the overall worth of your estate, making it easier for your estate to no longer meet the threshold for an estate tax.
Even though all of what has been written above is true, there is one thing to note: any gifts you give can be subject to a gift tax that, as with an estate tax, is charged by the Federal government.
Right now, the gift tax is $18,000 per recipient. If you give more than $18,000 worth of gifts to one person, in a single year, you will need to pay taxes on those gifts.
Outside of a regular gift, you can also give a lifetime gift. A lifetime gift can contain any number/amount of assets and, although there are rules and exclusions, is a great way to greatly reduce the taxable value of an estate.
You can also transfer assets to your spouse. But, when they pass away, it is likely that their estate will have to pay taxes on those items.
02: Developing A Trust
A trust is a legal arrangement that allows you to give certain assets to another person.
By giving these assets to another person, they can then be given to a beneficiary, when you pass away.
Many trusts allow you to minimize your tax obligations. By setting up a trust of this sort, you can give your assets to your chosen beneficiaries, without needing to pay any – or, at least, as many – taxes as you normally would.
Just as an example, a charitable trust can be used to give certain assets to charity, thereby reducing the taxes you would owe.
Other trusts offer similar benefits. But, the best way to figure out which trust is right is to speak with a lawyer.
Speak With A Florida Estate Planning Lawyer Today
If you would like to give your beneficiaries the assets you own, without having to pay any taxes on your estate, you are going to need to obtain legal assistance.
Speak with a Florida estate planning lawyer at the Millhorn Elder Law Planning Group today and we will help you develop an estate that bypasses the estate taxes you would normally need to pay.
Source:
irs.gov/businesses/small-businesses-self-employed/estate-tax
