Vermonters currently are allowed a state estate tax exemption on the first $2,750,000 of their gross estates. This exemption can have a huge effect on your estate plans. You may note that this level is lower than the federal estate tax exclusion of $ 5,250,000. In both cases, any assets left to your surviving spouse are exempt.
Providing for your family, particularly your spouse is the most important aspect of most estate plans. Once a sufficient amount of resources are allocated to your immediate family, you can safely dedicate other assets to more distant relatives, friends and colleagues. As long as you color within the lines and your estate remains below prescribed levels, no estate taxes will apply.
You can easily leave all of your estate to your spouse and many individuals continue to do just that. The downside of such a strategy is that your spouse is left with a larger estate to bequest at his or her death.
Once you have assessed your current situation and anticipate the future needs of your family, it is a good time to establish your estate plans or update your current plan. You have always put family first and your estate plans will reflect that love and concern. Tax planning of this nature requires you to think several steps ahead to minimize any tax liability when your assets once again change hands, often long after your own passing.
- Words to the Wise: Five Estate Planning Suggestions - March 1, 2021
- Updating Your Plan: Beneficiary Designations - February 26, 2021
- Four Inheritance Planning Tips for Blended Families - February 17, 2021
