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Estate Tax Issues

Tax planning attorneys serving central California

Estate taxes are currently low. In 2010, fewer than 20,000 estates were required to file a return. However, 10 years earlier, there were almost five times as many returns. It may be only a matter of time before the pendulum swings back the other way and revenue-hungry government agencies seek to take a larger share of your legacy. It is certainly impossible to predict what the tax code may look like 20 or 30 years from now, or even 20 or 30 months from now.

Given this instability, now is an excellent time to schedule an appointment with Law Office of Jeffrey B. Pape, P.C. An experienced tax planning and estate-planning attorney, such as board-certified tax attorney Jeffrey B. Pape, can give you and your family the advice you need to help you prepare for the return of high estate taxes. After all, preparation for the unknown is the crux of estate-planning law.

How can a board-certified taxation lawyer assist with planning?

Estate tax rates tend to hover at or above 40 percent but can sometimes approach as much as 50 percent or more. The estate tax exemption for 2013 is $5 million, meaning that the estate pays no estate taxes if the estate is valued at less than $5 million. The estate only pays taxes on the overage; for example, a $6 million estate pays taxes on $1 million. There are essentially two ways to reduce potential estate tax liability:

  • Maximize your gifts - The IRS's gift tax exemption usually changes every year, but for 2013, the exclusion is $14,000. Giving financial gifts to your heirs while you are living, essentially as an advance on their inheritance, means that they do not have to pay taxes on that money when you pass away.
  • Minimize your assets - By transferring your assets into certain kinds of trusts, you may be able to keep these assets out of your will and avoid the probate process and probate litigation altogether.

Is an IRA a good tax planning device?

There are many types of IRAs, 401(k) accounts, 529 plans and similar devices. Each one has its own rules for minimum contributions, minimum distributions and the tax consequences of withdrawals. Be sure you are fully versed in all these rules before making any decisions.

What happens if the estate owes taxes?

If any part of the estate exceeds the exemption, the estate must complete and submit IRS Form 706. You must list the current fair market value of the item. The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Experienced attorneys providing effective tax planning services in Fresno County

At Law Office of Jeffrey B. Pape, P.C., board-certified tax attorney Jeffrey B. Pape personally oversees your case from start to finish. Our professional experience helps us prepare a tax plan that is tailored to the needs of your estate and your heirs. Contact Law Office of Jeffrey B. Pape, P.C. at 800-797-5677 or online to schedule your confidential consultation.