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Tax Issues In Estate Planning
A well-crafted estate plan can preserve assets and leave a legacy for loved ones. However, there’s more to estate planning than writing wills and trusts.
To make the most of your estate plan, you also have to take tax laws into account. These laws can change quite frequently, and even drastically, at the federal and state levels, so it may be important to update your estate plan from time to time in order to make sure it is in line with current tax law.
The skilled attorneys at Coodin & Overson, PLLP, in Woodbury, Minnesota, help clients manage their wills, trusts and other estate planning documents, making sure they are in accord with their wishes, their goals and the most recent laws.
State And Federal Estate Taxes
The federal estate tax tends to get a lot of attention in politics, but its importance is still up for debate. In 2000, the federal estate tax applied to estates worth more than $675,000. About 52,000 estates paid the tax that year. In recent years, Congress has repeatedly increased the level at which the estate tax kicks in, and under the most recent overhaul, the tax now kicks in at well over $10 million. The number of estates that will trigger the tax is estimated to be no more than a few thousands a year.
Still, with careful planning, even the very wealthy can allow their estates to avoid the federal estate tax, so that they can pass on more of their assets to their loved ones, instead of to the federal treasury.
It’s a different story for Minnesota’s estate tax. Minnesota’s exemption for the estate tax is scheduled to rise over a period of years, but currently the tax kicks in for estates worth about $3 million or more.
With real estate holdings and other assets counting as part of one’s estate, a relatively high number of estates in Minnesota can be valued at above $3 million. You may want to speak with a lawyer about whether the tax will apply to your estate and learn about your ways for preserving your assets.
Update Your Plan
Everyone should have some kind of estate plan. It can be relatively simple or highly complex. How complex is up to you, your needs and your goals.
If you already have a plan, check in with the law firm to see if the law has changed its effectiveness and if it still meets your needs.