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As tax laws continually change, so do the rules regarding the tax implications on estate planning such as federal estate and gift taxes and state inheritance (death) taxes, as well as the definitions of, and rules regarding, what constitutes ‘gross’ and ‘taxable’ estates. This section provides articles and answers to frequently asked questions concerning when and how estates become taxable, how estate plans may be able to lower or avoid tax liabilities and how wills and trusts affect estate taxes.
Estate Taxes
If you have a large estate, your estate may be subject to estate taxes at your death.
Can a will reduce estate taxes?
A Will alone usually doesn’t have much effect on estate taxes. There are several kinds of taxes that might apply to an estate or inheritance. There’s the Federal Estate Tax, ...
My accountant told me not to leave money to my grandchildren because the tax would be too high. Was he correct?
That depends on the size of your estate. The generation-skipping transfer tax (GSTT) applies, on top of Federal Estate Tax, to certain amounts of money left to third-generation beneficiaries. So ...
Are there techniques available to reduce or avoid estate taxes?
An estate plan can take advantage of certain tax avoidance strategies for those who have accumulated some wealth; this gives more of your property to your intended beneficiaries, instead of ...
When does an estate become taxable?
An estate becomes a taxable entity (just like a business or an individual) with the death of an individual and continues to exist until all the assets are disbursed to ...
Are there techniques available to reduce or avoid gift taxes?
Giving gifts to charity before or after your death will allow you to reduce your taxable estate. Similarly, with the hike in the unified credit dollar amount, more lifetime transfers ...
How can my estate plan lower the federal transfer tax liability?
Everyone gets a credit against Federal estate and gift taxes of $555,800, in 2004 and 2005, which is equivalent to transferring $1.5 million tax free to your heirs. (The estate ...
How can a trust lower the federal estate tax liability?
Everyone gets a "credit" against Federal Estate Taxes of $550,800 on an exemption amount of $1.5 million in 2004 and 2005 (or $2 million 'Everyone’s estate below a minimum amount ...
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