How to Lower Estate Taxes
Federal estate taxes are taxes that will be owed upon your estate after you pass away.
Your estate will owe taxes if your assets are worth more than a certain amount. The
maximum estate tax rate is quite high, so finding ways to decrease your taxable estate is
Will You Owe
In 2009 the estate tax exemption level was 3.5 million. This year, Congress did not renew
that level so there is currently an unlimited exemption amount and there is no federal
estate tax at all. In 2011, however, the tax rate is expected to return to a previous low of
one million dollars. This will put more estates in harm's way of owing taxes. If your
estate is worth more than one million dollars and you pass away in 2011, your family will
have to pay a tax rate of up to 55% for all assets above the exemption level. Thankfully,
this hefty burden can be reduced or avoided.
What Can Help
Your attorney can help you reduce your expected estate taxes in a number of ways, using
advanced techniques. You can gift items to your loved ones: up to 13,000 per person per
year and up to one million dollars for your lifetime. You can also put inheritances into
irrevocable trusts such as a "B" for your surviving spouse or employ a lifetime trust for
gifting to your children. You can set up an irrevocable trust to house your life insurance
policies, removing their value from your personal estate. You can also give money to
charity through a charitable trust. If you want to ensure you will have an income, while
protecting your funds and creating a means for "leveraged" gifting within your family,
you can create a family limited liability company.
What to Avoid
If you have an estate that may owe estate taxes after you pass away, you should avoid
planning with only a last will and testament or a revocable living trust that are devoid of
tax structures. With such a will or trust, there is no way to avoid unnecessary taxes.
Consider advanced planning options mentioned above to reduce your taxable estate.
Experienced estate planning attorneys Seattle WA of the Byrd Garrett PLLC offers estate
planning and business planning resources to residents of Seattle WA. To learn more
about these free resources, please visit http://www.byrdgarrett.com today.