Advanced estate tax planning now may reduce tax liabilities later

Jackie Bedard
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Did you know:
  • The estate tax is separate from the income tax, and is paid on the net value of all of your assets, including death benefits on life insurance, your home and real estate, your retirement and bank accounts, and any other items or accounts that you own at your death in excess of the estate tax exemption amount?
  • In 2013, the estate tax rate is schedule to be 55% on all assets over $1 million?
  • For most families, estate taxes are totally voluntary? Only people who fail to plan will end up paying estate taxes.

Advanced estate tax planning focuses primarily on reducing transfer taxes and income taxes, specifically the three taxes most commonly imposed on the transfer of assets: the gift tax, the estate tax, and the generation-skipping transfer tax. In addition to the transfer taxes that may apply, income taxes can also often be reduced for transfer recipients.

The gift tax applies to transfers made during life. The estate tax applies to transfers at death. The generation-skipping transfer tax applies to transfers during life or at death which passes over the children's generation and goes directly to grandchildren and generations that follow.

Advanced Estate Planning Strategies
Depending on the needs of your family, the following tax reduction tools may be useful:
  • Private Charitable Foundation
  • Life Insurance Trusts
  • Qualified Personal Residence Trust
  • Charitable Remainder Trusts
  • Grantor Retained Annuity Trust
  • Retained Unitrust
  • Asset Protection Trusts
  • Land Trusts
  • Dynasty Trust (Protection against the generation-skipping transfer tax)
  • Family Limited Partnerships
  • Asset Gifting

To learn about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.