Unsure How To Handle Estate Taxes? Let Us Help Minimize The Pressure

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 Orange County estate planning lawyer from our firm can help you prepare an individually tailored plan to meet your needs.

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:

  • Gifts - 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.
  • Irrevocable Trusts - 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!

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