Estate Tax Planning

When discussing their estate plans, many find their greatest concerns center on taxes. This is understandable. The laws concerning estate taxes change frequently. At any given moment, it is difficult to know the best way to protect your assets from the IRS.

The Law Offices of Craig Donoff, P.A., can help. Based in Boca Raton, and serving throughout southern Florida, our attorneys have the experience and depth of knowledge to answer even the most complex questions that our clients have regarding estate taxes.

Our principal attorney, Mr. Donoff, holds a Masters of Law degree in taxation from the University of Miami School of Law. For more than four decades, he has written books, articles, given lectures, and held seminars to help individuals gain a clearer understanding of the ways that proper estate planning can be used to protect assets and beneficiaries.

Estate Tax Laws Are In A Constant State Of Flux

Every estate is planned...Either by you or by the IRS. The estate tax structure can effectively reduce your estate by up to 40%. By following these basic steps of estate planning, you can significantly reduce this tax impact.

  1. Prepare a will. Be sure it keeps pace with changes in tax laws and your own circumstances. Unfortunately, seven out of ten Americans die without a will and, consequently, the laws of their states decide the disposition of their assets.
  2. Use your federal unified estate and gift tax exclusion. In 2017, the IRS allows each of us (except nonresident aliens) to pass $5.49 million of assets to beneficiaries free of federal estate taxes. Using the applicable exclusion amount during your lifetime can effectively reduce your estate by the value of the gifted property, as well as any income earned or subsequent appreciation on the property.
  3. Monitor retirement plan assets. Determining the appropriate strategy for dealing with the estate and income taxation of these accounts depends on your individual objectives. We recommend that you consult your attorney or tax advisor on this issue. Be sure to update your beneficiary designations to qualify for the "stretch" IRA tax rules.
  4. "Gift away" what you don't need. Lifetime gifts not only reduce your estate and subsequent estate tax liability, but also shelter asset appreciation from taxation. You may transfer up to $14,000 per person each year without incurring any gift tax; spouses together may gift up to $28,000 per person. (Additional gifts made directly to educational institutions for tuition or to medical care providers are also excluded from gift tax.) Gifts to charities may be exempt from gift tax. In addition, these charitable donations may qualify for current income tax deductions.
  5. Keep enough assets liquid to satisfy estate taxes. Generally, the IRS demands that any estate tax liability be satisfied within nine months of the date of death. Be sure your heirs aren't forced to sell investments at the wrong time because of a shortage of liquid funds.
  6. Have a trustee or an irrevocable trust purchase your insurance policy. Usually life insurance proceeds avoid probate and are exempt from income tax. However, they are subject to estate tax if you own or have rights in the policy. Purchasing the policy within an irrevocable trust may prevent life insurance proceeds from increasing your estate tax liability.
  7. Start soon. Update your plan as soon as possible. The only people that will benefit are you and your family

Reach Out To Us

To learn more about how proper estate planning can help you and your surviving loved ones avoid probate and potential will disputes, contact the our offices today. We can be reached by calling 800-416-4543 or by completing our online contact form.