Minimizing Estate Taxes
Upon death, and individual's estate is subject to taxes - up to 55% in some cases. Most people would prefer to pass on their hard-earned assets to family members instead of paying unreasonable estate and death taxes.
At the Law Offices of Jasleen K. Anand, we offer estate planning services designed to minimize estate taxes. To find out more about our services, or to schedule a free consultation, please call (866) 728-8389 or contact us online. Our office is located in Nassau County, but we also serve clients in New York City.
Minimizing Estate Taxes
There are several ways in which to minimize estate taxes. Some of these include:
- Gifts — By giving gifts away during life, the gifted assets are not subject to estate taxes. An individual can give away up to $12,000 per year without having to pay gift taxes.
- Donations — Charitable gifts to religious, educational, or non-profit organizations are not subject to taxation.
- Giving to spouse — According to federal tax laws, an individual can transfer assets - of any amount - to their spouse without a tax penalty.
- Irrevocable life insurance trust — This is a trust capable of holding life insurance, and may be exempt from federal estate taxes.
In 2009, the estate tax exemption amount is $3.5 million. This may seem like a great deal of money. However, when the monetary value of various assets is tallied - retirement accounts, life insurance policies, real estate - this amount can be reached surprisingly fast.
Our attorneys are focused on helping families deal with all their estate tax matters. If you have questions about minimizing estate taxes, exemption amounts, or any other issues, please contact us.
Estate tax exemption amount by year:
In 2009, the estate tax exemption amount is $3.5 million.
In 2010, there is no estate tax.
In 2011, the estate tax exemption amount will be $1,000,000.
Economic Growth and Tax Relief Reconciliation Act - EGTRRA
After September 11, 2001, Congress passed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA). Its purpose was to stimulate the economy by cutting a number of taxes. Under this act, estate and gift taxes were greatly altered.
The "Sunset" of EGTRRA and its Consequences
The Economic Growth and Tax Relief Reconciliation Act made many changes to the estate tax, increasing the unified credit exclusion to $3,500,000 in 2009, changing the estate tax, gift tax, and generation-skipping tax rates, and putting in place a repeal of the estate tax in 2010 (meaning no tax for decedents' estates in 2010). The most significant matter for estate planning purposes is the "sunset" provision for the law, which is set to occur on January 1, 2011, when the provisions of the estate tax revert to where they were prior to the enactment of EGTRRA in 2001.
Congress could extend the repeal. They may alter the tax rate, or they may do nothing. This means any estate plans created in the last eight years may need to be substantially modified. If you have updated your plan, it should be flexible, permitting further modifications, if necessary. With these changes on the horizon, it is essential you speak with an attorney knowledgeable of estate planning and the consequences of the sunset of EGTRRA.
Contact Us
For answers to questions about federal or state taxes, please contact a lawyer for a free consultation. Call (866) 728-8389.
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