Estate tax services from THEVOZ Attorneys
Taxpayers with significant estates were no doubt happy when the estate tax limit was raised to $11 million from $5 million in 2018. This meant their beneficiaries could inherit up to $11 million in assets without having to pay onerous estate taxes.
What many people do not realize is that this new, larger limit will only last until 2025. Unless Congress extends the higher limit, it will revert to $5 million.
The uncertainty of this situation makes it difficult for people to plan for the future. Those persons with estates between $5 million and $11 million may be wondering how to handle this uncertainty.
THEVOZ Attorneys feels this is an opportunity for you and your beneficiaries to review your estate plan and create options that will allow your beneficiaries to inherit from you without a massive tax bill.
We would like to work with you to create a “profile” of all your major assets, with the purpose being to define the financial impact on your heirs if the estate tax limit should revert after 2025:
- The IRS will total up the value all the assets of the estate, that will become the taxable value of the estate. It is advisable to have a good sense of what the size of the total estate is to determine if it is over $5 million but under $11 million. However, the focus of our estate planning services is to make sure your wishes are respected and your beneficiaries are provided for, and not just estate tax limits and lifetime gift tax exemptions.
- Assets that are worth less than $15,000 may preferably be given as gifts while the holder of the asset is still alive, so it is not counted against the lifetime gifting limit of $11 million. The giver of the gift may have to file an estate and gift tax return if the gift exceeds that $15,000 limit. If there are enough of these types of assets, it may be advisable to develop a schedule for gifting them to heirs.
Planning for the future is still possible in the climate of uncertainty created by the question of whether the increase in the estate tax limit will persist after 2025. However, it is important to start planning as soon as possible to ensure you have enough time to respond and implement the different options available to you.