When you create an estate plan, that plan should accomplish a number of inter-related goals. One of those goals should focus on tax avoidance. After all, no one wants to lose a significant portion of their estate to Uncle Sam. One common mistake you should avoid, however, is to rely too heavily on the marital deduction. An Indianapolis estate planning attorney at Frank & Kraft explains the marital deduction is often not enough to protect your estate from federal gift and estate … [Read more...] about Why the Marital Deduction Is Not Enough
If you live in Indiana and see the words “Indiana inheritance tax” you may very well wonder why anyone would bother talking about a now-repealed form of taxation. For while the state did at one time levy that tax on inheritances, that old system of taxation was retroactively repealed in a law that went into effect in 2013. For heirs whose loved ones passed away after January 1, 2013, no inheritance tax is due. But does that mean that your future inheritance is free from any inheritance tax … [Read more...] about Indiana Inheritance Tax: Is Your Inheritance at Risk?
As complex as estate planning is in a general sense, many of the finer points involved in creating a sound plan can be even more confusing for the average person. Take estate taxes, for example. You will often hear analysts and others dismiss concerns about this tax on the basis that only about one percent of estates are ever subject to its provisions at the federal level. While there is some truth to that argument, it fails to address a broader truth: though the current law exempts estates with … [Read more...] about The Annual Gift Tax Exclusion: How it Can Help with Your Estate Planning
There is a federal estate tax that can come into play if you intend to transfer a significant amount of wealth to your loved ones. This tax carries a 40 percent maximum rate, so it can take a toll on the financial legacy that you are passing along to the next generation. Fortunately, everyone is not exposed to the estate tax, because there is a relatively large credit or exclusion. The exclusion is the amount that you can pass on before the estate tax would be applicable. We should point … [Read more...] about Estate Tax Efficiency for High Net Worth Families
If you hear the term "inheritance law," the document called a last will may come to your mind. This is the most commonly used estate planning document, but the importance of inheritance law extends far beyond the ability to create a valid will. There are various different ways that you can facilitate asset transfers when you are planning your estate. You should certainly explore your options, because a last will is not going to be the ideal choice in many if not most cases. When a will is … [Read more...] about Inheritance Law: Understanding the Importance
People sometimes hear bits and pieces about estate planning topics, and they go forward with certain misconceptions. We endeavor to clear up some of these misunderstandings from time to time, and we will address one of them in this blog post. Death Taxes Taxes can come into play after someone passes away when assets are being transferred. There are federal taxes, and there are also a state-level taxes. While there is no tax that is formally called a "death tax," this term is often used to … [Read more...] about Indiana Does Not Have an Inheritance Tax Anymore
When you hear about estate taxes, you may immediately think about the federal level. Many people are aware of the fact that the exemption on the federal level is quite high, so you could go forward with the impression that your estate will not be in taxable territory. It is true that there is a relatively high estate tax exclusion or exemption. In 2016, the amount of this exclusion is $5.45 million, and the top rate is 40 percent. Only the portion of an estate that exceeds the amount of this … [Read more...] about State-Level Estate Taxes: Are You in the Clear?
Giving to charitable causes and institutions can be quite rewarding when you are devising your legacy plan. If you are in a position to do so, you could engage in philanthropic acts that benefit worthy nonprofit organizations. There are various different ways that you can support charities, and one possibility is the creation of a private charitable foundation. When you think about private foundations, you may immediately flash upon the foundations that have been established by some of the … [Read more...] about What Is a CLAT?
An inventory of your assets will be called for when you get serious about your estate planning efforts. Clearly, you want to identify what you have to pass along to your loved ones when you are devising your plan, but there is another relevant factor. The federal estate tax can be applicable when assets are being transferred after someone dies. This tax carries a maximum rate of 40 percent, so we are talking about a very significant level of asset erosion. Everyone does not pay the estate … [Read more...] about Estate Tax Can Loom Large for Farmers and Ranchers
When you give someone a cash gift, you are passing along money that you have left after you paid your taxes. It would be logical to assume that you can give gifts without any further tax consequences, but in reality, there is a gift tax in place. Fortunately, the tax is not a factor for most people, because there are exclusions that can be used to give a certain amount in a tax-free manner. One of these is the annual gift tax exclusion. This exclusion allows you to give a certain amount to … [Read more...] about Annual Gift Tax Exclusion Will Stay the Same in 2016