Orange County Estate Tax Lawyer
Facing Estate Taxes? Consult an Experienced Attorney!
Estate taxes are the tax liabilities which are assessed by the Federal
Government and imposed on a decedent's estate. They can take a big
bite out the estate you wish to pass to your children and grandchildren.
Federal law provides an exemption to the tax, and the exemption amount
has bounced up and down over the years depending on the political climate.
At the beginning of 2013, however, the U.S. Congress made the federal
estate tax permanent, with an exemption of $5.12 million per individual
and a tax rate of 40 percent for any amount over the exemption. To put
it simply: An estate valued at $5,120,0001 would pay $0.40 in tax, while
an estate valued at $6.12 million will pay $400,000 in
taxes. If you fail to pay estate taxes, you could be facing serious issues with the
IRS. Though many states charge an estate tax in addition to the federal tax,
California has recently abolished its estate tax.
Though most people do not possess an estate large enough to incur the estate
tax liability, those who are concerned about this tax do have options for
asset protection so that they can pass the largest possible amount on to their loved ones.
In other words, the estate tax is not inevitable. By establishing a well
thought out estate plan now, you can do this both smoothly and economically.
In some case, you can even retain possession and control of the assets,
so that you can continue to derive the benefits of ownership without the
tax liabilities. A
Newport Beach estate planning lawyer from our firm can help you prepare an individually tailored plan to meet
Tools to Avoid Estate Tax in California
There are tools you can use to pass assets to your family outside of your
estate. This not only serves to minimize or eliminate the estate tax liability,
but also to avoid the time and expense of
probate. Here are two important approaches:
You may make annual gifts to your children or grandchildren up to a certain
limit without incurring a gift tax. To further reduce the tax liability,
both you and your spouse can each make individual gifts. By doing this
each year, you can pass considerable amounts of money and assets to your
family. At death the funds are not yours and are therefore not subject
to the estate tax.
If you wish to retain some benefit from the funds while still removing
them from your estate, you may use irrevocable trusts. Under this procedure
you set up a trust with instructions to the trustee to provide for your
needs while you are alive, with you as a beneficiary of the trust. At
your death, the trustee is directed to disburse the funds to your children
or other heirs. If you fund the trust with annual gifts up to the gift
exemption limit, you can avoid any gift tax in process.
P. Arnsen Blakely - We Give Advice You Can Count On
At P. Arnsen Blakely, we have assisted clients with their
estate tax planning in Orange County since 1971. We keep up-to-date on changes to the applicable laws and the
most effective strategies for minimizing the tax liability, and can advise
you of your legal options. Our
Orange County estate planning attorney is adept at helping clients to plan their estates to minimize estate tax
impact no matter what Congress may do in the future.
To learn how we can help,
call our office and set up a
free initial consultation!