What to Know About Estate Tax and Florida Estate Planning
After you work your whole life to provide for your family, some people assume that drafting a Will is enough to protect your loved ones after you pass away. However, proper estate planning is more than just drawing up a Will. Spend the time to ensure your estate plan is complete. That can help ensure your assets are protected, help your family avoid probate, reduce the risk for conflicts, and eliminate or minimize your estate tax risk.
Any number of issues can arise with your estate when you pass away. When problems occur, your family members may need to retain a Pompano Beach estate & trust litigation attorney who can help.
Importance of Minimizing Your Estate Taxes
When you pass away, the Internal Revenue Service (IRS) places a value on your estate. If your estate’s value exceeds the federal exemption amount, then your chosen Personal Representative will need to file an estate tax return.
There are legal methods that can eliminate the risk that you will leave behind any tax liability. One option is to use an alternative valuation date. The U.S. Tax Code allows you to use a different date to value someone’s assets, other than the date they passed away. When the market is declining, this reduces the estate’s overall tax base. For example, you own a home that is worth $1,500,000 on the date of your death, but six months later, it’s only worth $900,000. That reduction in value can provide significant savings when calculating your estate’s tax value.
Types of Assets Calculated for Estate Taxes
It’s essential to understand what types of assets are included in the calculation for estate taxes. Some of the more common ones can include:
- Real estate
- Bank accounts
- Other cash
- Stocks and bonds
- Business interests
Figuring out possible deductions can help reduce your estate’s tax liability. Possible deductions might include:
- Administration expenses your estate incurs
- Property that passes to a surviving spouse
- Assets that are passed to a qualifying charity
Fortunately, the estate tax only applies to the wealthiest estates, so many people won’t come close to the threshold amount. In 2020, the exemption amount is $11.58 million. You can transfer up to that amount without owing federal estate taxes to the IRS.
Contact a Pompano Beach Estate Litigation Attorney
If you are dealing with a family member’s estate issues, don’t go through it alone. Letting conflicts go unresolved can cost the estate unnecessary money. To learn more about how a Pompano Beach estate litigation attorney can help, contact Mark R. Manceri, P.A., today to schedule an initial consultation.