• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
  • Services
    • Asset & Business Planning
    • Dental Practice Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid and Elder Law
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Carmel, Indiana Elder Resources
        • Fishers Indiana Elder Law Resources
        • Greenfield, Indiana Elder Law Resources
        • Greenwood Elder Resources
        • Indianapolis Elder Law Resources
        • Lawrence Elder Law Resources
        • Plainfield Elder Resources
        • Zionsville Elder Law Resources
    • Estate Planning
      • Estate Planning Checkup
      • Estate and Gift Tax Figures
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Asset Protection Planning
        • Business Succession Planning
      • Elder Abuse
      • Elder Law
        • Medicaid
        • Medicaid Planning
        • Planning for Long-Term Care
      • Estate Planning
        • Avoiding Estate Taxes
        • Estate Planning for Parents
        • Frequently Asked Questions for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Women and the Need for Estate Planning
      • Financial Planning
      • Incapacity Planning
      • Legacy Wealth Planning
      • Pet Planning
      • Philanthropy in Your Estate Plan
      • Probate
      • Power of Attorney
      • Small Estate Administration
      • Trusts
        • Trust Administration
        • Trust Administration
        • Serving as Executor
      • Understanding Your Social Security Retirement Benefits
      • Wills
        • Contesting a Will
    • Newsletter
    • Pre Consultation Form
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Carmel, Indiana Probate Resources
        • Greenfield Probate
        • Greenwood Probate
        • Indianapolis Probate
        • Plainfield Probate
        • Indiana Probate
        • Zionsville Probate
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Areas We Serve
    • Boone County
      • Lebanon
      • Zionsville
    • Hamilton County
      • Carmel
      • Fishers
    • Hancock County
      • Greenfield
    • Hendricks County
      • Brownsburg
      • Plainfield
    • Johnson County
      • Franklin, Indiana
      • Greenwood
    • Marion County
      • Central Indiana
      • Indianapolis
  • Blog
  • Contact Us

Frank & Kraft, Attorneys at Law

Indianapolis Estate Planning Attorneys

CONNECT WITH US TODAY(317) 684-1100

Attend a Free Workshop
Home » The Estate Planning Implications of Hamilton County Affluence

The Estate Planning Implications of Hamilton County Affluence

May 19, 2016Estate Planning

Hamilton County Indiana

We practice law in Indianapolis, and we serve many clients who live in Hamilton County. A while back, Eyewitness News 13 carried a story about the affluence of Hamilton County residents. They cited a Census Bureau study that was conducted to determine the wealthiest counties in the country. Hamilton County came in at number seven.

Clearly, success is what we all strive for, and wealth is a very good thing. At the same time, you also have to take steps to preserve your wealth, because taxation looms large. Let’s look some facts about the federal estate tax so that you can understand the lay of the land.

Death and Taxes

There federal estate tax has been around since 1916, and it can have a significant impact on your legacy. Fortunately, most people do not pay the tax, because there is a relatively high credit or exclusion. However, if you are exposed, you must implement tax efficiency strategies, because this tax carries a very hefty 40 percent maximum rate.

We have a federal estate tax credit or exclusion. This is the amount that you can transfer tax-free before the death tax would kick in. For the rest of 2016, the exact amount of the federal estate tax exclusion is $5.45 million. Each year there are adjustments to account for inflation, so you can expect to see a slightly higher figure year-by-year if the laws do not change.

You would be using a portion of your exclusion to leave a tax-free bequest to anyone other than your spouse. There is an unlimited marital estate tax deduction. This deduction allows you to transfer unlimited assets to your spouse free of taxation, as long as your spouse is a citizen of the United States.

This citizenship requirement tells you something about the value of the marital deduction as an estate planning strategy. The tax man does not extend the marital deduction to non-citizens because a surviving spouse who is a citizen of another country could return to that country with a tax-free inheritance. The IRS would never be in a position to collect anything.

If you are married to an American citizen, and you leave your spouse a large tax-free inheritance, this does not solve the estate tax problem, because your spouse would then be in possession of an estate that could be taxed. Even though there is an unlimited marital deduction, you should discuss tax efficiency strategies with a licensed estate planning attorney if you face exposure.

Getting back to a non-citizen spouse, there is an estate tax efficiency strategy that can be implemented if you are married to a citizen of another country. It would be possible to make your spouse the beneficiary of a qualified domestic trust. Your spouse could receive income from the trust’s earnings throughout his or her life, and these distributions would not be subject to the estate tax.

Estate Tax Exclusion Portability

Since 2011, the estate tax exclusion has been portable between spouses. In an estate planning context, the term portability is used to describe the ability of a surviving spouse to use the estate tax exclusion that was allotted to his or her deceased spouse. Using the figure that is in place during the current calendar year, a surviving spouse would have a total exclusion of $10.9 million.

However, portability is not automatically granted by the Internal Revenue Service. You have to opt for portability, and this is done through the filing of IRS Form 706. The form must be submitted within nine months of the passing of the decedent in question, but you can ask the IRS to grant you an extension if you need one.

Federal Gift Tax

In addition to the federal estate tax, there is also a federal gift tax. This tax exists to stop people from giving lifetime gifts in an effort to avoid the death tax. We touched upon the $5.45 million exclusion previously. The exclusion is a unified exclusion, because the estate tax and the gift tax are unified. It applies to gifts that you give while you are living along with the estate that you are passing along to your heirs.

The unlimited marital deduction also applies to lifetime gift giving. You can give your citizen spouse any amount of money and/or property while you are alive free of the gift tax.

Schedule a Consultation

There are steps that you can take to preserve your wealth if you are exposed to federal transfer taxes. To explore your options, call us at (317) 684-1100 or send us a message through our contact page to schedule a consultation.

  • Author
  • Recent Posts
Paul A. Kraft, Estate Planning Attorney
Paul A. Kraft, Estate Planning Attorney
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Paul A. Kraft, Estate Planning Attorney
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
  • Updated Federal Gift and Estate Tax Figures for 2023 - January 26, 2023
  • Why Estate Planning Is Important for Multi-National Couples - January 24, 2023
  • When Do I Need to Update a Trust Agreement? - January 19, 2023

Other Articles You May Find Useful

Top 10 Estate Planning Tips
Indianapolis estate planning attorneys
The Pros and Cons of Sharing Your Estate Plan with Loved Ones
question mark
Answers to 5 Common Estate Planning Questions
Inheritance and bequest
Is an Inheritance and a Bequest the Same Thing?
estate plan
Why Do I Need an Estate Plan?
LGBT History Month
Reviewing Your Estate Plan for LGBT History Month

Primary Sidebar

Frank & Kraft, Attorneys at Law

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscription

Where We Are

Frank & Kraft Attorneys at Law
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN 46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111

See Larger MapGet directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

frankkraft_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

Frank & Kraft Attorneys at Law
Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.

© 2023 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us