Long Island estate planning lawyers provide assistance to individuals and families who could be affected by state or federal estate taxes. Many people with larger estates worry about the impact of estate tax on their estate and want to find ways to avoid being subject to substantial taxes after death. A variety of tax planning tools are often used to try to reduce or avoid estate tax, including inter vivos giving, trust creation, and creation of a family limited partnership. Soon, however, …
Are New York Estate Taxes Different from Federal Taxes?
New York estate taxes are separate from, and different from, federal estate taxes. It is possible you will have to pay New York estate taxes when federal estate tax payments are not required. If you or someone you love owns property or assets within the state of New York, you need to know the rules for how your estate will be taxed after your death. Eghrari Law Firm provides comprehensive assistance with all estate tax matters. We can help you to understand when and how New York estate taxes …
What Is a Grantor Retained Annuity Trust?
A grantor retained annuity trust can be part of your estate plan if you are exposed to the federal estate tax. In this post we will look at the "zeroed out" grantor retained annuity trust strategy. First, we must provide some background about the federal estate tax parameters. Exclusion and Maximum Rate At the end of 2010 a tax relief act was passed that set the estate tax exclusion at $5 million in 2011. This act called for annual adjustments to account for inflation. A couple of years later, …
What Is the Generation-Skipping Transfer Tax?
You have to be concerned about preserving your wealth if you have been financially successful throughout your life. There is a federal estate tax that carries a hefty rate, and it can significantly erode the wealth that you are passing along to your loved ones. In 2014, the maximum rate of this tax is a robust 40 percent, so we are talking about a rather large bite. This is not the only federal transfer tax. If it was, you could give gifts while you are living to avoid the estate tax. To …
Will My Heirs Be Forced to Pay an Inheritance Tax?
People can sometimes get confused about taxes on asset transfers. In this post we would like to provide some clarity as we look at the difference between an inheritance tax and an estate tax. Inheritance Tax An inheritance tax would be levied on asset transfers to each nonexempt inheritor. Fortunately, there is no inheritance tax on the federal level. There are a handful of states in the union that impose state-level inheritance taxes. Our firm practices in the state of New York. There …
Trusts for Estate Tax Efficiency
The federal estate tax can dramatically reduce the wealth that you are passing along to your family members. At the current time the top rate of this tax is 40 percent. This is quite a sizable chunk to be leaving behind to Uncle Sam as a parting gift. The amount of the federal estate tax exclusion is $5.34 million. Only the portion of your estate that exceeds this amount is potentially subject to the federal estate tax. If you intend to transfer assets that exceed this amount, you must …
Do I Pay Taxes When Someone Leaves Me Money?
People invariably have questions when they hear about taxes on inheritances, and this is understandable. In this post we would like to look at transfer taxes and provide some useful background information. Income Tax In general, if you receive an inheritance you are not required to report the bequest as income on your income tax return. However, the situation becomes more complicated if you inherit appreciable assets. This is a matter that you should discuss with a tax lawyer or estate …
Do All Trusts Preserve Wealth?
Estate planning for high net worth individuals will involve the implementation of wealth preservation strategies, because the proverbial tax man is standing at the ready prepared to pounce as soon as you pass away. Some people are under the assumption that you are surrendering personal possession of assets once you place them into a trust of any kind. This would lead you to the belief that assets that you have conveyed into a trust would not be counted by the IRS when your estate tax exposure …
“Green Book” Released; Estate Tax Rate Hike Proposed
Every year the president puts together a proposed budget for the following year that is called "The Green Book." The proposal for 2015 has been released, and this is newsworthy to the estate planning community. Rate Hike In 2018? The proposal targets a number of different areas of the tax code that are relevant to the field of estate planning. For one thing, the proposal would increase the maximum rate of the estate tax. The increase would take effect on the first day of January in 2018. The …
New York State Estate Tax Exclusion Has Increased
There is a federal estate tax that high net worth Americans must contend with, and the amount of the exclusion stands at $5.34 million in 2014. There was a base of $5 million put in place for the 2011 calendar year, and there have been annual adjustments to account for inflation ever since. Next year you might see a somewhat higher figure when another inflation adjustment is added. Some of the states also levy state-level estate taxes. This is commonly done in the Northeast. We practice law in …
Large Inheritances Tend to Evaporate
The federal estate tax is considered by many to be an instance of double taxation. The critics contend that the assets that comprise your estate are accumulated after you pay taxes on your income or investment earnings. These assets are not taxable while you are alive by virtue of their very existence. But somehow the event of your death is viewed as a taxable one. And, a taxable one at a rather high maximum rate of 40%. A recent article in the Wall Street Journal talks about the pattern …
Powerball Provides Estate Tax Insight
The federal estate tax is applicable after you utilize the entirety of your $5.25 million unified gift/estate tax exclusion. Yes, the gifts that you give throughout your life are taxable as well. There is a $14,000 per person annual gift tax exclusion that exists outside of this unified exclusion. Once you give this much to one person in a given year you start using up your unified lifetime exclusion if you give more. Imagine winning a Powerball lottery prize. In May there was a …
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