Will your estate owe federal estate taxes after you pass away? These are federal taxes assessed to estates larger than the federal exemption level. Eligible estates will owe a hefty tax rate for items above the exemption amount.
Currently, there is no exemption level due to the fact that Congress did not renew the 2009 tax law. In 2011, estates worth more than one million dollars are expected to owe a tax rate of 55% for assets above the limit. If you are among those affected, you can reduce or eliminate your estate tax load.
There are several ways to reduce your estate taxes with the help of your attorney. The primary focus is on removing items from your taxable estate and placing them into an AB Trust for spouse or Irrevocable trusts for your children. You can also place funds into a Charitable Remainder Trust, which will provide you income during your life while removing those funds from your estate.
If you have sizable life insurance policy, you can place it into an Irrevocable Life Insurance Trust. This will safeguard those funds for your family, provide estate tax relief and allow you to create a slow disbursement schedule for your loved ones.
Another option is a Family Limited Liability Company which allows you to retain control of your property for income purposes. All of these options not only provide estate tax reduction, they also provide asset protection for you and your family.
Reducing your estate taxes can help to protect the inheritance of your loved ones. If your estate is hit with the expected 55% tax rate, your family’s financial future may be affected.
With estate tax reduction, you can provide your family with income for longer. This can give you peace of mind if you have underage children who will someday need funds for college or if you have a special needs family member who will need lifetime financial support.