Posted by Dana Law Group on March 7, 2023
Even though you might not want to think about what happens after you pass away, it is important to ensure as much of your estate gets passed down to your heirs as possible. You may think that you can simply give your assets away when you pass away. After all, they are yours; however, you need to make sure the estate tax does not take a sizable chunk of your estate.
This is why it is critical to work with an estate planning attorney. What do you need to know about the estate tax, and how can you protect your assets from it?
First, understand that there is an exemption to the estate tax. In 2022, the federal estate tax only applies if the assets are worth greater than $12.06 million. In 2023, this exemption will increase to $12.92 million, meaning that the vast majority of estates in the country are not going to be subject to the estate tax.
On the other hand, keep in mind that your estate is more than just your financial assets. In addition to the money you have in your checking account, savings account, investment accounts, and retirement portfolios, the property you own can also contribute to the value of your estate.
In addition, there are several states in the country that have their own estate taxes. In these states, the threshold at which the estate tax kicks in is typically lower than the federal estate tax threshold.
So, if you want to protect your assets against the estate tax, what do you need to do? There are several strategies you may be able to employ. For example, you may want to give some of your assets away to family members before you pass away, but you need to make sure you are not subject to the gift tax.
You may also want to set up an irrevocable life insurance trust or a qualified personal residence trust. There are different strategies that may work well for you, and that is where an estate planning lawyer can be helpful.
At the Dana Law Group, we are experienced estate planning attorneys who can help you make sure your assets are protected and that your inheritance is passed down to your family members. Give us a call today to schedule a case consultation, and learn more about how we can help you.