Florida Probate Attorney

Tax Relief from a Successful Estate Plan

Posted on 07. Aug, 2011 by Admin in Probate Law

The goal of estate planning is to guarantee that a person’s assets can be distributed to his or her family as well as to charity. The estate plan safeguards your assets that you have worked for in your life, regardless of the amount. An efficient estate plan is the best way to manage your wishes on how you want your assets to be distributed, including lawsuits and taxes.

Details herein provided for reference purposes only, provided on behalf of Chris Searcy.

In order for estate planning to be successful, it is imperative that it is prepared in advance. It can decrease taxes, and therefore the family members and charities can get more benefits from it. The usual way to distribute assets is to endow them to family members and charitable causes. In addition, assets, like appreciated stock, can be placed in a trust. If you have businesses, those can also be endowed. That way, the amount of estate is decreased and in effect, the taxes are decreased as well.

Tax Relief

There are many alternatives to maximize tax relief in regards to estate planning. The major aspect that must be considered is the value of assets. It is of your best interest to consult a financial advisor to assist you in going through the planning process. In addition, a financial adviser can assist you about taxation.

Marital Transfers

One option to defer payment of the estate taxes is through marital transfers; this does not eliminate taxes. Basically, a person is not required to settle taxes after endowing assets to the spouse. Nevertheless, the obligation to pay estate taxes is on the spouse after the grantor’s passing.

Lifetime Gifts for Children and Grandchildren

Presently, grantors are permitted to give gifts to children or grandchildren from the estate in a yearly basis without the obligation for gift taxes. Grantors are allowed to give gifts up to $12 thousand annually to decrease the estate’s value and hence, the tax obligations.

Irrevocable Life Insurance Trusts

This is another alternative to reduce estate taxes. It is similar to a life insurance premium; little transfers to an irrevocable life insurance trust accrue a huge asset other than your estate. In the majority of circumstances, the profits are not subjected to tax.

Family-Owned Companies

Having a family-owned company can entail decreases in taxes from the entire estate. This is referred to as qualified family-owned business interest (QFOBI); some requirements must be met in order to be eligible to tax deductions, which are:

• The grantor must own the business and actively participate in its operations in the last five years;
• Owning 50% of the business;
• The location of the business should be within the US.

The information in this article is provided by Searcy, Denney, Scarola, Barnhart, and Shipley P.A., providing legal services in the field of Will and Trust Disputes. This article is not intended nor should be considered legal advice.