Will Your Estate Be Subject to Hefty Estate Taxes?
Will Your Estate Be Subject to Hefty Estate Taxes?
Estate taxes can significantly reduce the value of your estate if not properly addressed. At Harp Law, we understand the complexities of estate tax laws and can help you minimize your tax burden. Here’s how proactive estate planning can protect your assets from excessive taxation and preserve more wealth for future generations.
What Are Estate Taxes and How Can You Avoid Them?
Estate taxes are imposed on estates exceeding certain thresholds at death. For example, individuals with more than $13.61 million in assets will be subject to federal estate tax. In states like New York, the threshold is $6.94 million because New York has a state estate tax. Luckily, here is Michigan, there is no Michigan estate tax. Accordingly, for most people, the only estate tax to keep an eye out on is the federal estate tax.
Without proper estate tax planning, an estate subject to the federal estate tax could owe hundreds of thousands of dollars in taxes, needlessly reducing the inheritance your loved ones receive. However, with the right strategies, this can be avoided.
How Trusts Help Minimize Estate Taxes
Trusts are one of the most effective tools for minimizing estate taxes. These allow you to transfer assets to beneficiaries while potentially reducing your taxable estate. Some of the trusts we use at Harp Law include:
Irrevocable Trusts: Assets held in these trusts are excluded from your estate, reducing taxable value.
Charitable Trusts: These provide a way to support a cause and reduce estate taxes at the same time.
Tax-Efficient Trusts: We create structures that help minimize taxes and maximize the wealth passed to your heirs.
Which Exemptions and Credits Can Help Reduce Estate Taxes?
By properly leveraging available exemptions and credits, we help minimize estate taxes:
Lifetime Gift Tax Exemption: Allows tax-free gifting up to a certain amount during your lifetime.
Marital Deduction: Allows unlimited tax-free transfers to your spouse, provided they are a U.S. citizen.
At Harp Law, we help you strategically apply these exemptions to protect your wealth from excessive taxes and ensure more assets pass to your heirs tax-free.
Stay Ahead of Changing Tax Laws by Updating Your Plan Regularly
Estate tax laws are always evolving. Regularly updating your estate plan is essential to staying compliant and maximizing tax-saving opportunities. Our team at Harp Law monitors changes in legislation and keeps your estate plan up-to-date, ensuring your wealth is fully protected.
Periodic reviews allow us to adjust for changes in tax thresholds, new exemptions, or shifts in your personal finances. This proactive approach helps you stay ahead and avoid surprises.
Don't let estate taxes erode the wealth you've worked hard to build!
We make the process simple and convenient! Start by booking a free 15-minute Estate Plan Chat. We’ll discuss your general goals, and see if we might be a good fit to work together.
Not ready for a chat but still want to learn more? Click here to download our free Estate Planning Checklist.