Yes, there are estate tax efficiency strategies that can be implemented. The ideal course of action will depend upon the circumstances, so personalized attention is key. Generally speaking, assets that have been conveyed into an irrevocable trust would be removed from your estate for tax purposes. There are a number of them that can be used to transfer assets at a tax discount. … [Read more...] about Are there steps that you can take to ease your estate tax burden?
Estate and Gift Tax FAQs
These are actually two different types of taxation, though many people naturally assume that they describe the same thing. As we have stated, an estate tax would be applied on the entirety of the taxable portion of an estate before it is transferred to the heirs. The arrangement is quite different with an inheritance tax. It would be imposed on transfers to each inheritor that is not exempt. As a result, there could be multiple impositions of an inheritance tax when one estate is being … [Read more...] about Is an inheritance tax the same thing as an estate tax?
There is a federal gift tax that has been in place since 1932, and the gift tax and the estate tax are unified under the tax code. As a result of this arrangement, the exclusion is a unified exclusion that encompasses lifetime gifts along with the estate that will be transferred after your passing. On the state level, New York and Vermont do not have gift taxes. Getting back to the federal transfer taxes, there are some additional gift tax exclusions that are separate from the unified … [Read more...] about Can you give gifts to sidestep the estate tax?
Generally speaking, inheritances are not subject to regular income taxes, so you get a break on that level. However, there is a federal estate tax that can take a heavy toll on your legacy, because it carries a 40% maximum rate. That’s the bad news, but the good news is that you are probably not exposed. There is a federal estate tax credit or exclusion that exceeds $11 million at the time of this writing. This is the amount that can be passed along before the estate tax would kick in. The … [Read more...] about Will my heirs be forced to pay taxes on their inheritances?