Experienced Estate Tax Planning Lawyers in Queens
The ability to leave loved ones with a large inheritance sounds like a wonderful benefit. Without careful planning, however, your well-meaning gift may turn into a crippling tax responsibility for beneficiaries.
What are Estate Taxes?
The government assesses estate taxes on real and financial assets. These taxes are due after an individual dies.
In 2021, any estate valuing more than $11.7 million may be subject to a 40% federal tax. Additionally, a variable New York State tax applies to states worth more than $5.85 million.
Who has to Pay Estate Taxes?
If your estate’s net value is greater than the New York State and federal thresholds for taxation, the estate’s executor will be responsible for paying the appropriate amount. This will reduce the assets that your beneficiaries inherit.
How is the Net Value of My Estate Determined?
To calculate an estate’s net value, add together the estate’s real and financial assets. Then, subtract liabilities such as mortgages and credit card debt.
How Can I Reduce or Eliminate My Estate Taxes?
Expert tax planning attorneys are well-versed in several legal, trusted methods to reduce or eliminate estate tax burdens. Your options may include:
- Leaving your estate to a spouse: an individual can leave their entire estate to a spouse; however, the tax may become due when the second spouse passes away.
- Giving gifts: U.S. tax laws allow you to gift $15,000 annually, to anyone, without reporting it to the IRS. Because this is an individual threshold, married couples can give away up to $30,000 every year, free of taxation.
- Leaving your estate to charity: a Charitable Lead Trust names a charity as the beneficiary. Estate tax burdens are reduced by the amount the trust pays to the charity.
- Protecting assets in a trust: there are several kinds of trusts, such as a Qualified Personal Residence Trust, that can protect some of your assets from taxation. A qualified estate planning attorney will help you identify the best trusts to suit your personal needs.
It may also be possible to lower the net value of an estate by applying alternate valuations that factor in asset depreciations over a six-month period. This method of valuation is not appropriate for all estates. A reputable estate tax planning attorney can advise on the best course of action.
Work with an Experienced Estate Tax Attorney in New York
Even if you expect your estate to be lower than these thresholds, and not subject to tax, it’s important to work with an experienced estate tax planning attorney. At FK Law Group, our attorneys can help you ensure correct estate execution. We work with estates of all sizes to protect assets, set frameworks in place to help your beneficiaries, ensure your estate meets the requirements set forth by the IRS / NY state and protect your assets. Contact our legal team to arrange a consultation and learn how you can prepare, protect, and safely bequeath your assets to loved ones now and in the future.
